Most people who are moving home decide to link the sale and purchase of the two properties. This has some common disadvantages which can be avoided if you sell your current property before you buy a new home.
What happens when you buy and sell at the same time?
When you decide to buy the new property on the same day as you sell the old one, you form a chain. You are dependent on your buyer for the sale of your current property, and your seller for the purchase of your new one. This forms a chain of at least three owners, often more.
The problem with a chain is that it only takes one link to break for the whole thing to fail and the longer the chain, the greater the risk. Your conveyancer (more on conveyancing for sellers here) will always make sure that both transactions go ahead simultaneously, if at all, but they cannot prevent someone in the chain pulling out and causing all the transactions to collapse.
What are the advantages of selling before you buy?
If you sell your current property first, you can put yourself in a stronger bargaining position. The seller of the property you wish to buy will know that the chain stops with you, reducing the risk to them of the transaction falling through. This enhances your attractiveness as a buyer.
You will already have the cash from your sale in the bank. You will know exactly how much you have to spend on a new property. Sellers find, quite often, that they are forced to accept a lower price for their property once a mortgage valuation or survey report is received by their buyer. If this happens to you, then you would have to find extra money to proceed with your purchase.
Can I get a better offer?
If you sell before you buy, then you may also be able to hold out for a better offer on your property, rather than having to accept a lower offer to avoid losing a house you are interested in buying.
Since any chain on your sale or purchase will stop with you, there are fewer links, meaning the transactions should both proceed more quickly than if your conveyancer and estate agent have to liaise up and down a longer chain.
If house prices in your area are falling, selling before you buy can give you a real advantage. You will have money in the bank to afford a more valuable property than you would have been able to buy had you tied the sale and purchase together.
Are there any disadvantages to selling before you buy?
Unless you can move in temporarily with family or friends, you will need to rent a home for the period between the sale of your first property and the purchase of your second. Rent can be more expensive than mortgage repayments and if you rent a smaller property to save money, you may have to pay for furniture storage too.
If you are unable to find a second property to buy within a relatively short period of time, you also risk house prices rising, meaning that your choice of second property is diminished.
How can OneDome help?
Whether or not you choose to sell before you buy, our online conveyancing platform can simplify the process. All parties get full visibility over the entire process. Homemovers, estate agents, and conveyancers can track the progress of conveyancing in real time, which makes it easier for everyone involved to get the clearest possible picture. It is also simple to send and sign sensitive conveyancing documents online, drastically reducing paperwork and trips to the post office.
Want to learn more about how OneDome helps people complete their move? Take a look at this explainer video for more information. Or, get in touch with OneDome’s friendly team on 020 3868 6262 today. They will be more than happy to help with whatever it is your need in your home buying or selling journey.