Buy and sell at the same time

ONE of the toughest things to manage when you make the decision to move house is how to buy your new home at the same time as you’re selling your current one.

It’s a tricky process – in a perfect world the sale and purchase would synchronise seamlessly and you could sign both sets of paperwork on the same day. But in reality, that’s rarely the case.

Here are a few handy tips on how best to buy and sell at the same time without putting yourself (and your finances) under undue pressure.

Understand your market

Jellis Craig director Andrew Kelleher says the one area where most people run into trouble when buying and selling at the same time is when they set their mind on buying a property that ends up going well beyond the sale price of their current home.

Kelleher stresses it’s critical to research the markets you’re buying and selling in, because you don’t want to sell your home only to find you’ve got no chance of securing your next one because it runs hundreds of thousands of dollars over your budget at auction.

Or worse: you buy your next home and are then left with a major shortfall when your current property doesn’t achieve the price you’d hoped for.

Test the waters

Many buyers want to know exactly how much money they’ve got to play with when they start searching for their next home.

Kelleher says a good way to ensure you’re searching for properties in the right price bracket is to float your property off-market first, which will allow a small selection of buyers to provide a guide on its potential value.

"Generally, what we recommend to people is to put their home on the market and to sometimes start it as an off-market sale," Kelleher says.

"Often, we’ll say, ‘Let’s put your home on the market quietly and get a bit of a feel for it’.

The challenge a lot of people have is they don’t know what they’re going to sell their home for, so they don’t know how much they’ve got to spend."

Extend the settlement

No one wants the hassle of having to move everything out of their house and into a rental property for a few months, only to pack it all up and move again a couple of months later once your new home settles.

So, if you do happen to sell your home while you’re still in the process of buying, ask for a longer settlement to enable you to bring the two processes into line.

"Sell it on a three-to-four-month settlement to give yourself time to go out there and buy something," Kelleher advises.

Marry the processes

If you do receive an offer on your home and you’ve also found a property or two that you’re interested in, speak to your agent about tying the timing of the two sales together.

"As soon as you get a good offer on your home, you don’t necessarily have to sell that day," Kelleher says.

"What we’d also recommend is starting negotiations on your number one choice, and we’ll try and marry the two up and do a buy and sell on the same day."

Obtain bridging finance

If you’re purchasing a home but have yet to find a buyer for yours, a bridging loan from your bank or lender will cover the cost of the purchase until you’re able to sell your property and pay the money back.

But Kelleher says bridging finance isn’t always assured, so speak to your lender to confirm that you’re eligible for it.

"Just in case they haven’t sold their home in time, they just need to make sure that (bridging finance) is a possibility for them. Because that’s the greatest fear – they haven’t sold and their settlement is looming and they haven’t spoken to the bank," he says.

"Speak to the bank and make sure the bank is going to be open to you (obtaining the finance) because sometimes you just can’t get that short-term loan."

Have things ready

As with any property transaction, it’s important to be ready to act as soon as an opportunity arises.

That means having your finance approved for your purchase, and having the contracts ready for your sale.

"I had one today where we spoke to the owner yesterday, we had an amazing buyer for a development site and we sold up this morning. They did have that contract ready, so we were able to lock in a great sale."