When you want to move house, the ideal situation is to have an excited buyer walk in with a brilliant offer the day after you put up a For Sale sign; after which you find your dream house on your first viewing, put in an offer, have it accepted and sail through the mortgage application process. Alternatively, you could see your dream house first and sell yours the next day; either way, you spend very little time floating adrift in the property market.
Sadly such perfect timing only happens in the movies. In real life, your best bet is to be assured of the sale of your own house before finalising steps towards purchasing your next home. The reason is that you’ll avoid being pushed into a ‘desperate to sell’ position with your back up against the wall. In such a scenario, you have less control over the sale and might be forced into accepting less than your desired price.
Another reason that selling your house first is preferable is so that you’re in a stronger negotiating position to make offers on your new home. The finances are ready and you’re able to proceed quickly, which is exactly what sellers and estate agents want. You also know exactly what your budget is – how much cash you have available and how much your mortgage needs to be.
There are cons
There are some risks of selling your house first, especially when property prices are rising (as they are now), as even a relatively short interval between selling and buying could push the market you were aiming for just out of reach. Even worse, you may not be able to get back into the property market at the same level as you were before you sold your house. So instead of being on the front foot, you could find yourself very much on the back.
The happy medium?
You can make it a condition of sale that you’ll only accept the offer provided you find a suitable property to buy. You can make a tentative arrangement or come to an agreement with the buyer if you can realistically estimate out how much time you’d need to find and make an offer on a new home. Your estate agent can prove invaluable in this. In this way, your buyer will be more likely to empathise with you and you’ll be giving them a clear understanding of how long they can expect to wait before they start the process of buying your old house. You can give a gesture of good faith by taking your house off the market. This is known legally as a ‘Conditional Offer Acceptance’.
It’s perhaps pertinent to ask yourself a few questions and make sure you have the answers before you put your house up for sale, for example:
• What area(s) do you have in mind?
• What kind of property are you looking to buy?
• Is your desired property commonly found on the market or are you looking for something ‘special interest’?
• What does your financial situation look like, i.e., how certain are you about getting a mortgage?
Once you have the answers to these questions, you can consult an estate agent on the best course of action.