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Should I sell my home before I buy a new one?

Most people sell their current home at the same time as buying a new one, forming a property chain. Selling before you buy has risks, but it can also have great advantages

Advantages of selling before you buy

  • It puts you in a stronger position when buying. The seller you want to buy from would almost certainly prefer a buyer who has the cash in the bank (and/or a pre-approved mortgage) rather than enter a chain, where their sale is dependent upon you finding someone to buy your house
  • You are less likely to be gazumped. If you put in a decent offer the buyer is unlikely to take another if it means entering a property chain
  • You remain in control of the sale of your own house – because you won’t need to make a quick sale, you will not be pressurised into selling cheaply
  • Those with time on their side are usually in the strongest negotiating position
  • You may get a better price if you find a seller who is keen to move quickly
  • You will know exactly how much you can spend because you’ll have the money from your sale in the bank – buying your new home won’t be dependent on you achieving the expected price on your existing one
  • If prices are falling, then houses get more affordable as you wait

Disadvantages

  • If you sell first, expecting to be able to buy quickly after, you may be disappointed and instead have to rent for a time, which can prove very costly
  • If prices are rising fast, by the time you’ve sold your house and sorted out somewhere to rent, a new house will be much less affordable. For example, if you rent for a year, and prices rise by 10% in that year, then you will only be able to afford 10% less

Renting can be stressful, but being in a chain, being gazumped, or feeling you’ve undersold can be worse.

Tips

  • If you do sell before you buy, make sure as many things as possible (mortgage etc) are organized beforehand so you can buy quickly.  See our step-by-step guide to selling to help you
  • Do your research before you sell. Decide what area you want to buy in, and what sort of property you want to buy
  • Keep an eye on the property market while you are selling just in case that perfect house comes along. You’ve got time so you might as well use it
  • Develop relationships with a number of estate agents before you sell, so that you get in there first with all good properties that come up for sale
  • Get your mortgage pre-approved. This will make you even more attractive to a seller.  See our guide on taking your existing mortgage with you
  • Try and slow down the selling process, by agreeing a longish period between agreeing an offer and exchanging, and between exchanging and completion. This might give you enough time to buy a new place in the meanwhile

 


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2 Comments

  1. Hello Maria, thanks for your questions. If you were to become a member, we’d be happy to look into this for you as we can provide you with access to our Home Helpline where you can speak to someone in more detail https://hoa.org.uk/join-us/

    You might also want to look at our information on mortgages here https://hoa.org.uk/services/mortgage-service-from-london-country/

    Comment by Chandni Sahni — December 3, 2018 @ 10:58 am

  2. What are the taxes I should consider if I want to buy a property out of my area now before I put my house on the market? Would you advise someone with money [small amount of cash + mortgage] to buy a property first then slowly move into that property while the main property is being cleared up in preparation for putting it on the market to sell? Is that a good idea? Can I get a short term mortgage?

    Comment by maria allen — December 1, 2018 @ 11:26 am

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