Pitfalls of buying and selling home simultaneously
Since most of us keep our equity in property, the process of buying and selling usually goes hand-in-hand unless you are a first-time buyer.
Though a common approach to conducting property transactions, buying and selling simultaneously can cause homeowners to make some rash decisions.
The best way to avoid this is to consult a trusted local real estate advisor who can help you manage the timelines so you do not end up making decisions you might later regret.
RE/MAX Southern Africa CEO Adrian Goslett said if homeowners receive an offer on their property, they might rush the purchase of their new home simply because they need to be out of their current home by a certain date.
Similarly, if they find their dream home first, they might rush the sale of their current home and accept low-ball offers so they can secure the necessary financing to buy the new property.
“Homeowners who choose to look for a property first before selling their home, or vice versa, have the benefit of definitive deadlines around which to work.
On the other hand, homeowners who choose to put their property on the market while they are searching for a new home, have no deadlines around which to work.
“Until they either sell or find a home, they must live with the uncertainty of not knowing how aggressively to be marketing their home or how much time they ought to dedicate to finding a new home,” Goslett explained.
Homeowners should involve a trusted real estate adviser from the very beginning.
“Before homeowners even begin the process, they ought to chat with a local suburb expert who can paint them a picture of current market conditions and help them set realistic expectations around timelines for both buying and selling.
“If homes in their suburb are selling fast, they might be advised to first find a new home before selling and vice versa,” Goslett said. Market conditions provide homeowners with guidance in how they approach the buying and selling process.
In a buyer’s market, homes will sell slower and fetch lower prices. In a seller’s market, homes will sell quicker and fetch higher prices.
For homeowners who are buying and selling within the same market, Grant Gavin, broker/owner of RE/MAX Panache, points out they will be market neutral.
“What you think you may be losing on one side, you’re gaining on the other. “For example, in a buyer’s market, you might sell your home for less than you may have wanted, but you will be buying at less than you would have paid in a strong seller’s market,” Gavin explained.
Ultimately there is no wrong or right way of buying and selling.
“The answer will depend on each individual situation – what works for one homeowner might not work for another,” Goslett said.
Provided you’ve followed the advice of a reliable industry professional, the transaction should run smoothly regardless of how you’ve chosen to go about it.