It’s the age-old question: do I sell my home first or buy a home first?

Selling your home and buying a new one that meets your lifestyle needs is no mean feat. Both processes require a major commitment of your time, emotions and finances. So, which comes first? Most people find it natural to sell their old home first, and then with the available funds, will go on to purchase a better property. However, there are also instances where buying first might be the best option. So, what should you prioritise? Let’s look at the pros and cons of each, as well as reflect on the real experience of a client who had recently juggled the selling and buying conundrum.

Option #1: Selling your home first and buying later

Whether your Sunshine Coast home is in Minyama, Buddina, Parrearra or Warana, the typical instinct is to sell your property first. With the Sunshine Coast being one of the most beautiful places in the world, there are lots of potential buyers who would love to live in your area and perhaps want to make your home their own. Selling your Sunshine Coast property first frees up your finances, which can help you establish a realistic budget when it comes to finding a new home. However, while you might think that it’s ideal to time the selling of your old home and purchasing of your new home as closely together as possible, this might not be always convenient on your end. Here are some typical roadblocks in this scenario: • You will need to manage both the selling and buying real estate processes at the same time. • It may take much longer than you anticipated to find and settle on your new dream home. • Real estate values may rise after selling, pricing you out of your desired market.

What’s the best thing to do, then?

If there is an interim period between your real estate sale and purchase, there are a number of good options you can look at: 1. Negotiate a longer settlement period on the sale of your home. 2. Organise to lease back your sold home from the new owner to give you more time to find a property. 3. Move into a temporary rental property. 4. Stay with family or move into a hotel and place your goods in storage. While this “midpoint” may sound more inconvenient, it actually can put you in a more opportune position by giving you time. These alternatives will generally save you money in comparison to buying before selling and incurring the costs of two homes and two mortgages. Just remember, though, to consider your accommodation arrangements when finalising the settlement dates on your Minyama, Buddina, Parrearra or Warana home sale and new purchase. Case study: Laura Our client, Laura, who recently bought a three-bedroom house in Minyama for $1.15 million, had been renting in the interim. To be safe, she organised a few extra days in the rental property past the settlement date in case something went wrong. "The actual [settlement] process was quite time-consuming and there were a lot of administrative errors,” explains Laura. "You just have to expect that there's going to be issues and to prepare for this - our settlement was delayed twice through no fault of our own." To cover the settlement delays, it was also necessary to negotiate more time in the rental property with the leasing agent. "I was lucky that they hadn't found a tenant yet. If they had, obviously it would have been a bit more problematic," says Laura.

Option #2: Buying your new home first and selling later

Buying before you sell can be financially tricky, but it’s also understandable given this competitive Sunshine Coast real estate market. After all, no one wants to miss their dream home! For some, too, the ease of a single relocation is worth the potential costs. However, without the equity from the sale of your existing Minyama, Buddina, Parrearra or Warana property, chances are that you’re going to need bridging finance to cover the purchase of your new home. This bridging finance often costs more than a standard home loan. There’s also an extra pressure that comes with buying first, leaving you with less control over the sale process.

What’s the best thing to do, then?

There are some steps you can take to reduce the burden of juggling two properties: • Make the sale of your existing Sunshine Coast home a contingency on the purchase of your new home. Be warned, though - this may put sellers off. • Negotiate a longer settlement on the purchase of your new property, giving you more time to sell. • Rent out your old home until it is sold. But keep in mind, a tenancy can make the sale process more complicated. • Rent out your new home while working on the sale of your existing home. This, however, requires timing the end of the tenancy with the sale of your existing home and seek legal advice around stamp duty It is also important to shop around if you are in a situation where you are maintaining more than one property and require two mortgages. Case study: Laura Let’s go back to Laura. She managed to obtain significant savings on her mortgage arrangements when purchasing her Minyama property by using the same lender who financed an investment property she bought several years earlier in Mountain Creek. After undertaking her own online research, Laura tried two mortgage brokers before settling on her new loan arrangements. The first mortgage broker was recommended to Laura, but she returned to the broker who had negotiated her first loan. “I thought they structured the loans a lot better, and it actually ended up being with the same bank which has my Mountain Creek loan,” says Laura. “Because I have the two properties there was a lot more flexibility.” “I got a discount off the rate. For the three year [fixed] I received 4.99% and for the variable 4.79%. The investment property was fixed a year or so ago so that’s 5.39% at the moment.” With this setup, Laura also has the convenience of an offset account attached to the variable portion of her Minyama property's mortgage.

Whether to sell first or buy first depends on your personal and financial circumstances

What’s important is that you are guided by real estate specialists who can help you make property decisions with confidence. Having a team of Sunshine Coast property experts by your side will enable you to maximise the sale of your current home in Minyama, Buddina, Parrearra or Warana, so you can seamlessly get the new property you desire. For more tips and helpful information when selling your Sunshine Coast property, speak to us today.

Contact the Worth Property Agents team today!

Hi there. We’re Simon and Fiona – your local husband and wife real estate agent team with a genuine and unique approach that’s changing the way people see agents. If you’re thinking of selling your Sunshine Coast home, we’re here for you every step of the way. To find out more about how we can help you prepare yourself and your home for sale on the Sunshine Coast, just reach out to us today.

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