Upgrading your home - sell first or buy first?

Upgrading your home is an exciting journey but we know that it can be a daunting process. Clients ask us all the time - whether they should buy first or sell first and how to avoid a limbo period where you need to rent?

We have helped so many clients through this process so here are some ideas for you to consider.

1) Rent-back Period

As part of the sale of your current home, you could incorporate a rent-back period which allows you (as the seller), to rent back your home for a specific period of time, from the buyer. The rent-back period then allows you time to go house-hunting for your upgrade.

Particularly in a strong market, and where the buyer is likely to be a property investor anyway, this option has worked well for our clients allowing them to sell their current home first, recoup the funds from that sale and then go searching for their next home.

This option gives you certainty regarding the funds you have available to purchase your upgrade and peace of mind that you won’t need to move houses while you are house-hunting.

2) Longer Settlement Period + Simultaneous Settlement

As part of the sale of your current home, you could incorporate a longer settlement period, typically up to 3 months, which allows you time to go house-hunting for your next upgrade.

Once you have secured a buyer of your current home who has agreed to the longer settlement period, this is your chance to find your next home.

Once you have put in an offer on your next home, your settlement team can help you coordinate a simultaneous settlement of your current home and new home.

Again, this option gives you certainty regarding the funds you have available to purchase your upgrade and ability to move right into your new home upon settlement.

3) Bridging Finance

Unlike the above options, a bridging loan allows you to purchase your new home first. A bridging loan is effectively a short-term loan that can help you finance your new home, while you sell your current home.

Each option has pros and cons and whether it is right for you depends on your personal circumstances. Contact our brokers for a free strategy session.