So the time has come to upgrade your house. But should you buy first, or sell your existing place first? It’s a tough choice.
We’ve made the decision (slightly) easier by setting out the key pros and cons.
Buy first
The good points
If you see a place that you know is just right for you, or that has truly unique features, you can grab it now knowing you won’t miss out to other buyers.
In a rising property market, buying today means beating higher property prices further down the track.
The downsides
You could feel rushed to sell your current home – which might even mean accepting a price below your expectations.
If your home sells for less than its listed price, you might face a funding shortfall.
No one knows what lies around the corner and changes in interest rates or other economic circumstances could impact your ability to pay off your new home.
The danger zone
It might take longer than expected to sell your home. That could mean having to take out bridging finance on the new place while still paying off your current home loan, and that could be a real financial squeeze.
Sell first
The good points
There’s no immediate pressure to sell, so you can hold out until you receive an offer you’re happy with.
With sale proceeds from your home locked firmly in the bank, you know exactly how much you can spend on the new place.
Stashing your sale proceeds in a high-interest savings account lets you earn additional income while searching for your next home.
The downsides
If property values are rising, you could end up paying more for your new home.
The danger zone
It’s rare that your home will sell in just the right time frame to move straight into your new home.
Unless you can juggle settlement times, you could find yourself officially “homeless” for a period. Even if you’re able to couch surf at a mate’s place for a while, you could face two sets of furniture removal and storage fees.
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