Buy first or sell first? Until now, it’s been a tough call, as there are definitely pros and cons to each.
Selling first
The pros
Selling first is generally considered safer and our research shows that 80% of people prefer to sell first. It means you have certainty around what you can afford to spend and are less likely to get caught short by over-extending yourself on your new home.
The cons
The downside is you have to find your next place in a set timeframe or risk having to move twice if your old home settles before your new one. That’s twice the packing, twice the unpacking, two lots of utility connection costs and complexity in working out how long to rent for (or move into your parent’s home for) as the timing of your next purchase may be unknown. Selling first and being out of the property market is also problematic when the market’s rising or when there is little stock available in your preferred area, as is currently the case, as it may be difficult to buy back in quickly or cost effectively.
Buying first
The pros
Buying first means you can take as long as you like to find that next, ideal home. And if the market’s rising, buying your next home at today’s prices, while letting the value of your existing home appreciate, puts you ahead. Buying first also means you can move once into your new home. It’s generally the best way, if it can be done safely.
The cons
If there’s no guarantee your current property will sell at all or for any particular price, then buying first is generally not considered the safe way. If there are no buyers, you’ll need to juggle not one, but two home loans for a period of time – this is called bridge financing. If you have money and a good guaranteed income, this may not be a problem. But for some homeowners, it can cause major financial strain. In this case, the pressure to sell your current home may mean you accept a price below your expectations. In many cases, the bank won’t actually allow you to settle on your purchase before selling your current home so if you put down a deposit and need to settle on your purchase before you have sold, there is a risk you will lose your deposit (unless you can get bridge financing). If you buy first you may also end up overextending yourself, if you achieve less for current home than you expected.
The practical solution?
The great news is that home buyers and sellers don’t need to agonise over this buy first or sell first dilemma anymore. With Brickfloor’s Market Price Guarantee homeowners can, for the first time, buy first safely. We make a commitment to purchase your home for a competitive price before you even list your home. It’s like insurance for your home sale, and means you can move forward on your next purchase, knowing for sure that your current home will sell for a competitive price. You may potentially end up receiving an amount above our Home Price Guarantee. In this event, you can simply use this upside to reduce your debt or to spend on whatever you like. “Buying first is a great strategy in a rising market, but our research shows less than 20% intend to do this because of uncertainty around the sale process. Brickfloor eliminates this uncertainty and empowers homeowners to buy first.” says Brickfloor founder and CEO Dean Fraser.
“Our Market Price Guarantee is an innovative advancement in the residential property sector that puts home sellers’ needs first and eliminates uncertainty and stress from one of the biggest financial decisions of a person’s life.”
“Feedback from customers has been incredibly positive with our product being described as ‘a gamechanger for sellers’ and ‘a revelation’.”
Want to learn more?
Speak to Brickfloor today about a Market Price Guarantee.
Know a homeowner who may benefit from Brickfloor’s Market Price Guarantee? Get in touch to refer a friend and receive $1,000 cash if they take up a Market Price Guarantee.
