What are the advantages of selling before you buy?

When it comes to the house purchasing process, no-one likes a chain. This is for good reason as according to This Is Money website, more than 300,000 property purchases fell through in 2020, up 12% on the previous year. A chain can collapse for many reasons and can result in significant financial losses, not to mention the time and emotional investments also made along the way.

Selling before you buy keeps the chain short. As you are under no obligation to make a quick sale, you can hold out for the price that you want for your property rather than coming under pressure to accept a reduced offer.

When it comes to estate agents, having sold your property demonstrates that you are highly motivated to move. According to estate agent Petty Son and Prestwich, they are then more likely to present you at the top of their list to sellers, meaning you will be shown properties first and be able to snap them up before other buyers get a chance.

Selling first will also put you in a stronger negotiating position when you come to buy. The current owner of your next house is highly likely to prefer selling to you with your cash in the bank, rather than accept an offer that is contingent on another property being sold. Again, that shorter chain comes into effect. Additional financial advantages include knowing exactly how much you can afford to spend on your next property, as the money will be in the bank.

What are the disadvantages of selling before you buy?

There are potential downsides to selling your house first. If you are hoping to be able to buy quickly once you have sold, you may struggle to find something that fits your needs and have to move into rental accommodation. If your search continues for a long time, this could feel like money down the drain. And if you do find yourself renting, it could prove costly in other ways such as paying out twice to hire a removal company or for the expense of keeping your belongings in storage.

As with economic factors acting in your favour during a house search, they can also work against you. If mortgage rates or house prices increase, you might be disappointed with the properties you can afford once you have sold.

Some buyers have also found themselves in the precarious financial position of having to pay two mortgages at the same time if their current home hasn’t sold quickly enough. You will need to ensure you are covered financially or risk losing the house you want to buy.

But is now a good time to sell a house?

It was widely reported, including in The Guardian, that the UK enjoyed a property sales boom during the pandemic. This was due to factors including the government’s stamp duty holiday, low mortgage rates and homeowners looking for extra space and rural living.

While the housing market has continued to be buoyant, online estate agent Zoopla suggests in a recent report that “the latest data shows a turning point in the rate of house price growth, which we expect to slow quickly with average UK house prices up 3% by the end of 2022”

So again, it really depends on your individual situation as to whether now is a good time to sell your house. Just make sure you’re armed with all the information and market predictions before you take the plunge, as selling first could just work in your favour.

If you are thinking of buying or selling your home, you may find some of these services useful: