Should I sell my house before I buy a new one?

Published on 31 January, 2017

Wood and Key - Should I sell before I buy blog 2018

 

One of the most common questions that estate agents get asked is this: “Should I sell my home before I buy a new one?” If it’s never occurred to you before, think about it.

When you move house, you have two questions to ask yourself: “Should I find a house and then sell mine?” Or: “Do I sell my house first and then start looking to buy?”

The advice every estate agent will give you is get your house valued as soon as possible and sell it first. You can even do it now by booking a free, no obligation valuation right here.

You see? We’re an estate agent and we just advised it. The reason? Well, in a nutshell, you’re always in a much stronger position in the house bargaining process if you sell first.

Even a quick valuation gives you a clearer picture of what you can afford, so book a free valuation now from your local Hatched estate agent. Oops, did it again. Sorry about that.

Estate agents say this not because it works in their favour but because it’s the best thing for you as a buyer.

Here are the most common objections agents hear to selling your house first:

  • I don’t need to sell my house yet, I’ll put it on the market when I find somewhere I like. It won’t be a problem, it’ll sell in days.
  • I might not find anywhere I like, and if I put my house on the market first I might end up letting down my buyer.
  • If I sell my house first I don’t want to end up renting or homeless.

It is an age old chicken-and-egg problem. But let’s have a look at these objections one by one.

I don’t need to sell my house yet, I’ll put it on the market when I find somewhere I like. It won’t be a problem, it’ll sell in days.

This is one of the most common concerns we hear from house sellers: it seems more logical to wait until you find your dream home before you put your current house on the market.

Yes, some houses will sell in days. But the average time a house is on the market in the UK – depending on who you listen to – varies from six to 13 weeks.

Even if it does sell in the first week, it might be too late. If you’ve found your dream house, one that stands out from all the rest, then you’re unlikely to be the only one who’s seen it. And if they have, you’re immediately at a disadvantage if the other buyer has sold first.

With no chain or delay in buying, they’re in the driving seat, and you’re not. You’re a much riskier bet for the owner of your dream house than the buyer who’s ready to go. That’s what the estate agent advising them would say too.

You could offer more money than your rival bidders, but even that might not sway them, and you really don’t want to be paying too much for a property in the first place.

By not putting your house on the market before you find a property, you not only lessen your chances of securing a house, you also greatly weaken your position when you do find somewhere, and it could end up costing you more.

I might not find anywhere I like, and if I put my house on the market first I might end up letting down my buyer.

Correct. You might not find somewhere you like and you may end up letting down your buyer. But this is a whole lot better than the scenario above where you lose the home you’ve fallen in love with. 

At least with a buyer in place, who has been made fully aware of the fact you haven’t found anywhere yet, you can go on viewing houses safe in the knowledge that you’ve given yourself a fighting chance of securing your dream house.

If I sell my house first I don’t want to end up renting or homeless.

Always remember: if you don’t want to sell your home at any time you don’t have to.

Exchanging contracts doesn’t happen for a number of weeks after a sale has been agreed. Even if that date did come along, it’s not as if the solicitors will just exchange contracts without your permission – they always have to get your authorisation first.

Our advice is to keep everyone informed right from the start of your intentions, you always have options.

And one other reason to sell first, especially if you are upsizing, is the longer you leave it, the more expensive the move could become. Let’s do the maths:

It’s January 2017 and you’re selling your house for £200,000. You can afford to increase your mortgage by £100,000, therefore allowing you to buy your next house at £300,000.

You decide not to sell for whatever reason and leave it for one year. The actual (average) increase in house prices that took place in the UK in 2017 was 2.7%.
    
This means in January 2018 your house is now likely to sell for £205,400, but the house you were looking at six months ago that was £300,000 in January 2017 is now worth £308,100. 

So you still have to increase your mortgage to get the same house, but now you’re increasing it by £102,700 instead of £100,000, leaving you £2,700 out of pocket, simply by waiting.

This is just one more reason in favour of getting your house valued and putting it on the market as soon as you start to look for a new place to live.

If you’ve made the decision to move, take the plunge and get your house on the market. Before you miss out on that dream house, book online or call Hatched for a free, no obligation valuation and let’s get started.

 

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