Selling Before Buying

The most common question every homeowner selling their property will ask is, “should I sell or buy first?”

If you ask the property agent, many will insist on buying before you sell. They would rationalise that securing a home first is in your best interest but in reality, it’s in their best interest.

Remember, if you buy and then sell to pay for the new home, the agent gets two sales out of you, despite how much more it’ll cost you to do this.

Logic dictates you go with convenience, so it’s likely you’ll use the same agent to facilitate both sales.

However, if you choose to sell first – and if you ultimately decide against it – the agent receives nothing.

Therefore, while agents are useful in helping you secure a house, take their words of advice when it comes to buying and selling with many grains of salt. They are in to make money after all.

Unless it’s a buyer’s market, it is always a smarter move to sell before you buy. It’s not ideal when you need the cash from one property to fund the new one.

Being in this situation is financially good for the agent but troublesome for you. But if you need more reasons to sell before you buy, here’s a few:

One of the worst things about buying and then selling is that you are working on a restrictive timeline.

You are at the mercy of lower offers just because you need the cash to pay off your new home.

However, if you were to sell before you buy and it doesn’t work out, you don’t have to worry about finding a place to live because you already have one; your home.

Furthermore, you don’t have to say yes (reluctantly) to offers you consider unreasonable just to close the sale. You are in full control here.

When you are pressured to sell because you need to pay off your new house, you are going to cave in at the first most acceptable sounding offer just to meet that requirement.

However, if you don’t have the spectre of a new mortgage hanging over your head, you can take your time.

Buyers won’t get the impression that you are desperate to sell and take advantage of that but more importantly, you can make clear and well thought out decisions without influence.

When you make the sale of your home reliant on the closing of your new home purchase, you create a clause whereby the sale is not valid/cancelled should you be unsuccessful in buying a new home.

The buyer’s agent should not allow their client to sign a contract with this stipulation but most agents are not as diligent as they should be.

It’s unnecessary to state the address of the property, just write something in a legal manner that basically states, "I don’t have to sell my home to you if I can’t find another house."

Be advised though, that this is morally deplorable and might get you a bad reputation if you pull this card constantly.

Buying a house immediately after selling is unnecessary. You can always rent first or continue staying in your existing house until you find a new property.

All the details can be ironed out with the buyer and added to the contract. Additionally, you can add a clause that allows you to rent your existing home from the buyer at a reduced cost while you search for your new property for a specified period of time.