Should you sell your property before buying a new home?

Should you sell your existing property before buying a new home?

Do you have your eye on a beautiful home currently on the market? Don’t let it slip away simply because you didn’t sell your existing property for the amount you expected. The Seeff Property Group suggests you put your existing home on the market as soon as possible. Selling your existing property before buying a new home can give you a stronger bargaining position.

However, as with most situations, there are pros and cons. 

The Cons of Selling Your Existing Home Before Buying a New Home

According to Gerhard van der Linde, Managing Director for Seeff Pretoria East, the ideal offer for sellers is typically one that is not dependent on the sale of another property. However, if you need to sell an existing property before buying a new home, this can be included in the Offer to Purchase through a suspensive condition.

The following includes several drawbacks of selling your home before buying a new home: 

• Emotionally distressing and inconvenient. Are you prepared to live out of boxes until you can move into your new home? If you sell your existing property before buying a home, it could be difficult for your family to settle in since you’ll be in a temporary residence. This is particularly difficult if you have children and pets to consider.
  
  
• Additional costs. If your new property is not ready for you when you sell your old property, you may have to rent a temporary residence and pay movers to transport your belongings. This incurs a costly expense that could otherwise be avoided. 

The Pros of Selling Your Existing Home Before Buying a New Home 

Selling property and buying a new property involve risks. Selling your existing home before buying a new one requires you to take a leap of faith. And yet, if you are well-prepared and the market conditions are right, selling first could be a wise decision.

The following includes several benefits of selling your home before buying a new one:

• Avoid disappointment. The risk here is that buyers frequently make offers on other properties based on the expected sale of their own property, which has yet to happen, and then face disappointment when their home sale falls through.  
  
  
• Eliminate double payments. If you sell your existing home before purchasing a new one, you won’t have to worry about paying the mortgage for two properties. 
  
  
• Increase your buyer power. Sell your existing home first, and you can pour more money into the dream home you want. You could also appear more favourable in the seller’s eyes because your offer won’t depend on your existing home that hasn’t sold yet. 

Many transactions conducted in South Africa today are subject to the sale of another property. You shouldn't be discouraged if you are tempted to sell before buying a new home. It might be the best decision in your circumstances - maybe you have access to a temporary residence via family and friends that would provide your family with a roof over their heads while you secure a new home.

As always, Seeff recommends that you consult with an experienced Property Practitioner for guidance. If you believe you’re ready to sell before buying a new home, let Seeff help you achieve a successful sale.