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Should I sell my home before I buy another?

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

Selling before you buy

Advantages of selling before you buy

  • When you sell before buying your next home, it puts you in a stronger position as a buyer. 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 pressured into selling cheaply
  • Those with time on their side are usually in the strongest negotiating position
  • You may get a better price on the property you are buying if you find a seller who is keen to move quickly
  • You will know exactly how much you can spend on the property you are buying 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 the economy is in a state of flux and it looks likely house prices will fall, then houses may get more affordable as you wait

Disadvantages of selling before you buy

  • 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 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 are selling before you buy

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