How to Sell and Buy a Home at the Same Time – Top Tips & What You Must Do!
Your Guide To Buying and Selling Your Home Simultaneously
Nowadays, most people usually have to buy first and sell second – when it comes to the property market. However, by doing so they risk paying two mortgages.
In this case, they will naturally head towards the other option, namely selling first and buying second. Still, this may come with certain issues, as they will most likely have to rush their purchase, plan two moving days, and possibly spend a lot of money on rent.
But what if we consider selling and buying a home at the same time? Even though you may think this is impossible, we are here to tell you what you should do to achieve this.
The Three Options
In order to sell and buy a home at the same time, you will have to either make your purchase subject to completion of sale, extend your settlement periods, or apply for a bridging loan.
However, there are two other things that you will have to do before rushing towards one of the options mentioned above. You want to make sure that selling and buying a home at the same time won’t affect your financial situation or put you in difficulty.
As you may know, it is recommended that you buy first and sell second in a market that rises. You will basically buy at a cheaper price and sell at a higher one – this makes for less risk as you sell your old home in a market that performs well.
On the other hand, a cooling market means that you should sell first and buy second. By doing so, you avoid paying two mortgages at the same time and it also reduces the pressure of accepting a pretty bad offer on your home. Naturally, selling first will also give you a set budget for the purchase of your new home.
Joining the Processes
If you decide to sell first, then you won’t have to accept the first offer you are given. You will have the time to think about it and consider other buyers as well. This also allows you to tell your agent to bring the sale and purchase processes in line with one another.
Selling and Buying a Home at the Same Time – Three Options
Extending the Settlement Period
Even though extended settlement periods are probably the best way to sell and buy a home at the same time, keep in mind that they are affected by the flexibility of the other party.
If you sell first, the buyer of your home will need to accept an extended settlement as a sale condition. This condition of sale will usually be a period of three to four months – you will have up to eight weeks to find yourself a new home and then another eight weeks to exchange contracts and finally settle.
However, you can achieve this if you buy first as well. In this case, your offer will have to be subject to an extended settlement period. This may not please the vendor as they may have already bought a home and will need to sell the property quickly.
Subject to Completion of Sale
As the naming suggests, this is a condition that can be added to your sale contract which makes your offer valid only when you have sold your own home. Basically, you won’t have to settle on the property you will purchase until you have solved the sale of your current home.
Obviously, this method does require some negotiation – after all, it also prevents the vendor from buying another property.
When you buy first and then struggle with selling your home, then you will most likely rely on a bridging loan. In short, this is a loan that’s placed on top of your current home loan, giving you the opportunity to service two mortgages at the same time.
Even though bridging finance can come with higher interest rates than the usual home loans, they can end up saving you money.
The Bottom Line
As you can see, selling and buying a home at the same time is not impossible. You just have to know the available options and be able to negotiate, in some cases.
If you have any questions about this particular practice or need more information about home loans in general, then you can contact our office for refinancing home loan help.
Our team will guide you through the process and will also make sure to find you the best lender for your needs. Reach out to us today – we’re happy to help you in any way we can! Contact us on on 02 9121 6247 or submit your scenario online.
So, why use Highline Lending for your home loan?
We meet for a consultation, obtain your supporting documents and proceed to structure and package your application for approval knowing exactly what the banks want to see. We also monitor your home loan post approval ensuring you’re home loan suits you and your financial position
We get paid a commission from our lenders as a result of introducing your business to them. Subsequently, our service is at no cost to you. Our commission does not affect your interest rate whatsoever, if anything, we’re in a position to get you a lower interest rate than the general public due to our relationships with our banks
With our many years experience in the industry, we’ve been exposed to both easy and complex loan scenarios. Each loan we process gets presented to over sixty financial institutions, ensuring we have explored all options possible and are able to provide a solution