For the third time this year we have seen weekly sales of property in the Melbourne metropolitan area exceed 1000 as reported by the REIV. It is now very obvious to all the professional Real Estate agents that the owner occupiers are re-entering the market place. The vast majority of our enquiry now is the person who wants to sell their own home and buy another. Sometimes upsizing: sometimes downsizing.
I have many questions asked of me as a real estate agent. None more so than: “What do I do first, buy or sell?”
The question is easier to answer than you think. The first question to ask is can I afford to hold two properties at once. Ask your banker/finance broker how much it will cost for bridging finance and whether the bank will let you hold both properties for a period of time. If the answer is yes, and the cost is not overwhelming, then I would always buy first and then sell. It means that you will only need to move once and it will be at a time of your choosing.
If the bank says that you can only own one property at a time, then you now have a decision to make. If you sell first, then you will not be in a financial jam, however if you cannot find the house you wish to purchase during settlement, you may have to rent or live with a friend or relative for a short time. In other words you may have to move twice and or store your furniture.
If you are going down this track, you should be looking for a long settlement on your home. 90 to 120 days is not unusually long and sometimes you may get a better price if you offer this length of settlement. The trick question to answer is: What do you do if you get a good offer with a short settlement. You need to work through the numbers.
Before you do anything when trading homes, it is a good idea to get an estimate on your property. This usually consists of three local agents giving an appraisal, or clients of JPP can always ask us for an opinion. You need to have a very good idea of what the market will most likely pay for your current property.
If you would like some advice before starting the process of buying and selling, please do hesitate to contact me for a chat.
Ian James
Director
JPP Buyer Advocates