October 2016 - Buy First or Sell First?
By Rich Harvey, Managing Director propertybuyer
Now that we are in the middle of Spring some buyers are struggling with the dilemma of selling first or buying first. This month our feature article looks at the pros and cons of buying first vs selling first. I'm speaking at the Sydney Property Buyer Expo on Fri 21-Sun 23 Oct about "How to Capitalise on Sydney's Infrastructure Boom". See links below if you'd like free tickets. I've also been blown away by the testimonials of our clients recently. One of the best parts of my job is seeing the happy smiles and hearing the joy in clients voices once they have secured their next home.
This October update includes:
1. The Buyers' Conundrum - Buy First or Sell First?
2. Sydney Property Buyer Expo: Fri 21-Sun 23 Oct - Free tickets!
1. The Buyers' Conundrum - Buy First or Sell First?
One of the most challenging aspects of moving house is timing the buying and selling process. Ideally you want a simultaneous settlement of your sale to coincide with the moving in date of your purchase...but things don't often go as planned. The purchaser's bank may delay finance, the solicitors may request a 14 day extension, settlement documents can go missing or something else can come up.
Whether to sell first or buy first depends on the type of property market. If we are in a "sellers' market" then the logical advice is that buying first is the best option. With fewer listings on the market, buyers are having to compete to find the ideal property and keeping upward pressure on prices. Auction clearance rates are high and days on market is relatively low compared to long term averages.
If we are in a "buyers' market" then the best option is the sell first. This is traditionally the more conservative and usual approach to the real estate transaction. The logic here is that you don't want to end up paying excessive interest costs on two loans not knowing when you are going to sell your existing property. Selling first means you know exactly how much you have to spend on your next property.
At present Sydney is still very much a sellers' market in most suburbs. But don't believe everything you read in the media. We are not in a bubble nor will we see massive price corrections. We are not tragically oversupplied and about to see prices fall. Median prices can vary widely each month depending on the types of properties sold so don't give too much credence to monthly variations in medians - rather look at specific comparable sales, the volume of transactions in a suburb and yearly median changes in surrounding suburbs.
As buyers agents, one of key benefits we bring for clients is giving them confidence to move quickly when the right property comes up. There is so much to consider when buying and selling at the same time and you don't want to make a mistake in selling too cheap or paying too much on the other side. Our buyers' agents are very accurate with their appraisals and coordinate the whole searching process eliminating a lot of the stress and time consuming sifting done by all buyers. In addition to this when it comes to negotiating a reasonable price, my team have been expertly trained by the best in the business. We advise an offer strategy that secures the property to beat other buyers, yet avoids over-paying. I have been personally blown away by the testimonials that my team have received recently. Click here if you'd like to read their stories.
Some other practical things to consider.
- There is a time pressure to find the next property to coincide with settlement date
- If the process takes longer than anticipated, you may need to move out and find alternative accommodation for short time - and incur the hassle and costs of moving twice
- If you are out of the property market for an extended time, you may find that prices keep rising and could price you out of your preferred suburbs
- You could negotiate a longer settlement with the purchaser to allow more time to sell, or even lease back for a short period
- You could rent out your new home or existing home to allow more time- but this makes the timing the end of the tenancy to suit your move in date even more problematic.
- You remove the time pressure for searching
- You will need to price your own home realistically so it sells within a reasonable time frame to avoid paying extra interest on the two home loans
- Investigate the costs of bridging finance for this option
- Buying first gives you more certainty to the relocation process and means you only need to move once.
Overall, my advice would normally be to sell first. However, in the current market and while there is a shortage of listings, it makes immanent sense to buy first if you have the financial capacity. Many of the properties we uncover for clients are "off-market" meaning they are not advertised to the general public. This gives our clients a significant advantage over other buyers.
If you are looking to buy before the years' end we can help you speed up your property search AND save you money. Please call my friendly team of professional buyers agents on 1300 655 615 or email your property wishlist today.
If you'd like a copy of our highly useful "Moving Checklist" click to download your copy here.
Rich Harvey is founder and Managing Director of www.propertybuyer.com.au, Australia's most awarded Buyers' Advocates. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime. Visit www.propertybuyer.com.au or call 1300 655 615.
2. Sydney Property Buyer Expo
See us in Sydney at the biggest property event of the year! Discuss all aspects of property purchasing and investing, meet our team at STAND 57 and join Rich Harvey for his daily seminars.
Utilising the most recognisable names within the property industry, the Property Buyer Expo offers free and paid seminars to investors wanting to gather information to make sound investment decisions. The exhibition is a must see for those wanting to either break into the property market, upgrade their home or build wealth through property investments.
Rich Harvey will be speaking on 'How to Capitalise on Sydney's Massive Infrastructure Boom'. Find out which projects will drive property growth and where.
Whether you are an advanced investor or beginner you will gain new ideas and motivation to advance your investment potential.
Important information for our readers:
- propertybuyer stand number - 57
- propertybuyer readers free ticket code - PBE16PROPBYR
Date: Friday 21st to Sunday 23rd October, 2016
Times: 10am - 5pm
Where: Exhibition Hall 5, Sydney Showground
Telephone enquiries: 02 9975 3311