Ideally you want to put your house on the market and sell it in minutes, but that’s not reality. Sometimes the market isn’t quite in your favour and it may take you quite a bit longer than you thought. You might be understandably eager or have seen a property you are really keen on purchasing, which might leave you wondering, can you buy a house or have a bid accepted, before selling your current property?
In this article you will find out:
- If you can buy your house before selling your own
- Should you buy before selling? (Pro’s & Con’s)
- Or whether you should wait to sell before buying (Pro’s & Con’s)
- Why the market conditions play a part
The simple answer is yes, you can. It requires you taking on a lot of additional debt, which obviously means additional risk, unless you can afford to do it with your own funds of course. What you may also mean is whether you can bid on a house before selling your home, the answer to this of course is also yes. With doing this you put a timeline on when you need to agree a sale on your house by.
There’s quite a bit too it though and it’s not completely straight forward, there are pro’s and con’s to buying before selling just like there are for selling before buying.
You should only bid and start the buying process on another property if you are confident that yours will sell really quickly. The seller will likely not wait around to wait for your property to sell, which will just cause them to become frustrated and seek other bidders. A lot of estate agents won’t remove the property from property portals until you get to a certain stage like instructing solicitors and proving that you have the funds.
There are advantages to buying before selling if you can fund the purchase through additional lending or savings. Here we’ve broken them down for you:
- Takes a lot of the stress out, as it removes part of the chain.
- You’re less likely to get gazumped because you’re less of the risk to the seller in terms of the property sale falling through.
- Best of all, you can take your time and find the perfect property, rather than feeling pressure to buy something due to your property selling.
- Stamp Duty will be more expensive as it’s classed as a second home
- You’ll also be subject to Capital Gains Tax on the property
- You obviously need a significant amount of funds or be in a position that you can afford an additional mortgage
What are your other options?
If you’re dead set on a house you’ve seen and just can’t bring yourself to pass up on it before it gets snapped up then you do have a few alternative options that could help:
- Sell Your House Fast Service – This is how we can help, if you’re looking for a fast sale, we’re able to buy your property in 7 days for cash. This should be more than quick enough for you to be able to go full steam ahead on your purchase.
- Letting out your existing house – You have two options in this one really, you can sometimes re-mortgage and change your product to a Buy To Let which will free up equity to purchase your next property. Alternatively, you can ask your mortgage lender if you’re allowed to rent out the house, creating extra revenue to pay for your mortgage on the next property.
On the complete flip side, should you complete the sale of your house before buying another. You can obviously only do this if you have somewhere to live lined up when the sale of your property is completed.
This method is going to mean you are waiting a while to move onto your next property, lets take a look at some of the pro’s & cons:
- You can wait until the perfect property comes to market; you don’t have to rush into anything.
- There’s no onward chain when you come to sell your property, which can be appealing to buyers.
- It’s a lot less stressful than buying and selling at the same time.
- You’ll have to find alternative accommodation for the period whilst your in between homes, which can be costly and could cause quite a bit of disruption in your life.
- Without having found your next property you might not be sure what the minimum offer you can accept on your property is, in order to have enough funds.
- You might struggle to find a tenancy agreement in which you can leave whenever you want, so might be tied into working around an onward rental.
You should always do your research into the market before buying and selling a property that goes without saying. If you are looking to buy a house before selling your own then you may be taking a significant risk in either borrowing more money or risking your purchase falling through if your house doesn’t sell quick enough.
Do your research as to how long you can expect your house to sell in your area, there are loads of tools out there that will tell you what to expect. If it’s a quick selling area then you may be able to get away with this at a relatively low cost to yourself, but of course you are still taking a risk.