Should you sell your house before buying 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 another home has risks, but it can also have great advantages.

You may be wondering if you should be under offer or even sell your house completely before buying a new one. Here are the pros and cons…

Advantages of selling your house before buying a new one

• Having a buyer for your house first puts you in a stronger position as a buyer. The seller you want to buy from would almost certainly prefer a buyer who is ready to progress rather than having to wait for you to find someone to buy your house. In terms of how long it takes to sell, it takes 8 weeks on average to get a sale agreed.
• When you sell your house before buying a new one, you are less likely to be gazumped. If you put in a decent offer and are ready to progress, the buyer is less likely to continue to consider other offers.
• 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.
• You will also know exactly how much you can spend on the property you are buying because you’ll know how much you are selling your current home for – buying your new home won’t be dependent on you achieving the expected price on your existing one.
• Those with time on their side are usually in the strongest negotiating position. You also have more flexibility about timing of your purchase so that you buy at the right time.
• You may get a better price on the property you are buying if you find a seller who is keen to move quickly.
• 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 if you sell your house before buying a new one

• If you sell your house before buying a new one, expecting to be able to buy quickly afterwards, you may be disappointed and instead have to rent for a time, which can prove costly.
• In a market where house prices are rising fast, it can be riskier. By the time you’ve sold your house and sorted out somewhere to rent, a new house could be 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 sell your house before buying

• If you do sell before you buy, make sure as many things as possible are organised beforehand such as seeing whether you can port your mortgage so you can buy quickly.  This will make you even more attractive to a seller.  See our step-by-step guide to buying and selling at the same time.
• Get your finances in order.  If you are selling a house with an existing mortgage, It’s a good idea to get a handle on the cost of moving house and speak to a mortgage broker to review your mortgage options if necessary.
• Being organised also helps to avoid delays.  See how long it takes to buy and sell.
• Do your research before you sell. Decide what area you want to buy in, and what sort of property you want to buy.
• When you are ready to sell,  decide what price you should sell for, compare the performance of local estate agents before short-listing and appointing an agent.

• Consider whether online estate agents are an option for you and compare ratings and packages from online estate agents
• Keep an eye on the property market while you are selling just in case that perfect house comes along.
• 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.
• Cash house buyers can be an option to consider if you want to break the chain — although there are a number of issues to weigh up.
• 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 house in the meanwhile.