Should I Sell My Current Home Before I Buy a New Home?

Decided to buy a new home, but not sure whether you need to sell your current home first? Here are some pros and cons to consider.

I’m going to sell, and then buy

Decided to sell your current house first, and then search for a new home?

Some benefits may include:

Better understanding of your purchasing power

If you sell first, you’ll know how much money you have available to purchase your next home.

Funds are readily available

Once you’ve reached settlement, you’ll have money available for you to purchase your next property, allowing you to use it as equity.

Utilise your equity

If you’ve put the hard yards in and built up your equity, buying your new home first could be a great way to utilise your equity.

Some cons may include:

Rising property prices

You may end up spending more on your new home than anticipated, as property prices may rise between selling your existing home and buying a new home.

Potential rental costs

Selling first means you’ll need to find somewhere to live until you’ve found your new home. This may mean paying for rent or other temporary accommodation.

Potential moving costs

You may end up paying for moving costs twice – once to your temporary home, and again to your new home.

I’m going to buy, and then sell

If you're going to buy your new home, and then sell your existing, here are some benefits and cons to consider.

Some benefits may include:

Take advantage of the property market if it’s in your favour

Buying your new home first allows you to take advantage of the property market if it's in your favour. For instance, if there a surplus of homes for sale and prices are relatively low, purchasing your new home can be advantageous. It also means you can wait to sell your existing home at the right time.

Avoid renting and multiple moves

Buying first means your likely to be able to move straight in! You’ll avoid having to find a temporary home and potentially paying rent, and moving twice.

Some cons may include:

You’ll need equity

If you're looking to buy first, you’ll need to ensure you have enough equity to cover any upfront costs associated with buying a new home.

Managing more than one loan

In addition to having enough equity, you’ll need to be prepared to manage more than one loan, which could be quite stressful.

Added pressure to sell

Managing more than one mortgage could add pressure when it comes to selling your current home. This may lead to hasty decisions being made.

If you're looking for more space, or want to upgrade features and amenities in your home,  moving isn’t your only option. Renovating your home could be a better alternative, depending on your circumstances. Learn more here.

This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.‍

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