The process of selling and buying a house is challenging, no matter how often you’ve been through it. You’ve got to get your property valued, sort your finances, and arrange viewings, and that’s before you’ve even thought about looking for a new house.
Trying to do too many things at once will leave you wondering if there’s an easier way around this…
You start to think about buying and selling at different times. Should you sell your house before buying? Or should you be buying a home before selling? Does this make it any easier?
All good questions, all ones which we’re going to explore today!
Alongside answering whether you should sell your house before buying, we’re also going to look at the general process of selling and buying a home and the pros and cons associated with buying first or selling first.
Still, trying to figure out where to start? Use this menu to help guide you, or get scrolling:
- Process For Selling And Buying A House
- Pros And Cons Of Buying A House Before Selling
- How To Buy A House Before Selling Yours UK
- Pros And Cons Of Selling Before Buying
- 3 Tips For Buying And Selling A Home Simultaneously
- Should You Sell Your House Before Buying?
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Step By Step Process For Selling And Buying A House
When deciding to sell your property and buy a new one, it’s essential to understand the process of selling and buying a house if you’re choosing to do them both simultaneously.
Whether you’re a serial mover or a first-time buyer, it’s always important to understand the process and learn ‘what happens when’.
This is where we come in! Let us guide you through the buying and selling process, to make you ready for the journey ahead…
- Get your property valued – Whether using an online valuation tool or inviting one (or more) estate agents around, you need to get a rough idea of the value of your property. Knowing how much you can afford when looking at other properties is crucial and will help with getting your mortgage offer.
- Sort out your finances – Once you have a rough idea of how much you will be able to set your asking price, you will also be able to work out how much you can afford on a new property. It’s a good idea to try to break down all the costs you will need to pay, e.g. estate agent fees, solicitor fees, deposit, and removal costs, to name a few. At this stage, you should also speak to a mortgage lender and work towards getting a decision in principle. This will put you in a better position when starting to make offers.
- Choose your estate agent – You will have *hopefully* had valuations from at least three different estate agents, and now’s your time to choose which one you would like to sell with. We suggest you go with the highest offer and look at what the estate agent is promising to offer you.
- Find a property – Arguably one of the most crucial parts of moving to a new house! You may find your perfect property immediately, or it may take several weeks (or months). However long it takes, it’s essential that you’re prepared; it may take some time.
- Find a buyer – This part of the process isn’t really under your control, and more lies in the hands of your estate agent to do the ‘dirty work. However, you can help find a buyer ASAP by making sure you’re available for viewings and keeping your house clean and tidy to make it present better to potential buyers. When the buyer makes an offer on your home, you should negotiate with them to come to a price you agree with.
- Instruct a solicitor or conveyancer to begin conveyancing – Conveyancing is the part of the process which will get you from just having an offer to exchanging and completing. It’s essential to have a good relationship with your solicitor as they will be one of your primary contact points for updates on the process. You may also need to pressure pressure to your solicitor at times, so it’s essential to have a good relationship, so they take your requests on board.
- Set exchange of contracts and completion date – This will also be up to your solicitor to sort out but make sure you select a rough exchange and completion date early on so you know what date you’re working towards when trying to organise removals. Usually, you will exchange contracts and then have a gap of around 1-2 weeks to complete, although this will vary depending on the date you can agree on.
- Organise the move – You know, arrange removals, sort out what’s happening with electricity, gas, water, Wi-Fi – all the essential bits that are easily forgotten!
- Move out – You’ve made it! Time to get the removal men in, hand over your keys and go collect the new ones!
You can use online valuation tools as a guide for your property valuation, as Zoopla and Rightmove have the most accurate data available from HM Land Registry, although we would argue that this shouldn’t be used as a final sale price as your property will differ from already sold properties.
This may sound like a lot of hassle, making you start to think about whether or not it would be easier to buy a house before selling. And that takes us ideally onto…
Pros And Cons Of Buying A House Before Selling
If the more traditional process of selling and buying a house at the same time isn’t for you, then you could look into buying a house before selling. However, like anything, there are upsides and downsides to doing this, which we’ll discuss for you now…
Pros Of Buying A Home Before Selling:
- Removes part of the chain – By buying a house before selling, you’re stopping any property chain below you, meaning you’re not waiting on your house to sell to be able to buy. This means less stress, and you become a more appealing buyer to any seller, as you won’t be slowing the process down.
- Less risky to seller – As you’re not waiting for the sale of your property to buy, you are less risky to the seller, as no chain below you could pull out of the sale, causing the whole process to fall through. As a result of being less risky, you’re less likely to be gazumped, as even if another buyer puts in a higher offer, the seller will likely still stick with you due to you carrying minimal risk.
- No pressure – As there’s no push from selling your property, you have as much time as you want to find the ‘perfect property.
- Can time the market – When buying a house before selling, you can pick your timings. For example, you could buy a property whilst the market is cold and then sell your property when the market is hot. This way, you’re more likely to get a higher price for your property whilst paying a lower price for your new home.
Cons Of Buying A Home Before Selling:
- Second home Stamp Duty – When buying a house before selling, this will mean you own two properties, meaning you will have to pay second home Stamp Duty Land Tax (SDLT) rates. Anyone buying a second home over £40,000 is subject to this, and the rates are 3% higher than SDLT on the primary residence. However, you can claim this if you sell your other property within three years of buying the new one. If you want to determine how much SDLT you would have to pay, this helpful calculator may give you some answers.
- Capital Gains Tax – You don’t have to pay Capital Gains Tax (CGT) if you sell and buy a property simultaneously, but if you buy a house before selling, you will be susceptible to CGT when you sell your old property. CGT is a tax paid on profit made when selling an asset which has increased in value.
- Ability to afford – With buying a house before selling, there is the ultimate problem of figuring out how to buy a new property without selling your current one. In the next section, we’ll cover some options in more detail, so stay tuned…
How To Buy A House Before Selling Yours UK
Okay, so you’ve read the pros and cons and have decided you’d like to buy a house before selling yours. Great… just one small problem – how do you buy a house before selling yours?
A good question! We’ll give you some things you’ll need to look out for and answer ‘how to buy a house before selling yours UK’.
Things to look out for:
- Sellers aren’t usually keen on accepting an offer from a buyer who hasn’t sold their home, which will slow the process down. To avoid being dismissed, state that you can buy their house before selling your current property.
- Another issue you may face as a buyer who hasn’t sold their property and doesn’t have their property on the market is that a lot of sellers and estate agents will not even allow you to view a property until you at least have your property on the market, as no one wants to show time wasters around their property. This makes it extra vital to state your position, so you don’t get put into the ‘time waster’ category.
- This is more of a tip for you, but it is not easy to know how much you can afford to pay if you’re buying a house before selling yours. You may end up selling your house for less than you expected and spending too much for a new house, leaving your finances in the wrong position.
How To Buy A House Before Selling Yours UK
The main issue when buying a house before selling is deciding how you will finance this. Let us help remove some of this stress and talk you through your options…
- Extend existing mortgage or remortgage – if you have enough equity in the property which you will be selling, you can release cash to fund your new home by either remortgaging or extending your existing mortgage. If you choose to remortgage, you will need to do this with a new lender, meaning you’ll have to make a new mortgage application. Doing this early is essential as it can take months to decide.
- Get a bridging loan – A bridging loan is a short-term interest-only repayment loan secured against residential, commercial property or land. People often underestimate the risky nature of this loan as, if you cannot sell your old property as quickly as you expected, the monthly interest payments can become extortionate. This type of loan is usually ideal for those who are downsizing and have much property equity.
Pros And Cons Of Selling Before Buying
So buying a house before selling isn’t appealing to you, and you’re starting to think, should you sell your house before buying?
Well, once again, that’s a good question. To help you come up with your opinion, we’ve got the pros and cons of selling before buying listed right here…
Pros Of Selling A Home Before Buying:
- Stronger negotiating position – By selling your house before buying, you’re a ‘chain-free’ buyer, making you more attractive to sellers. This puts you in a stronger negotiating position, as most sellers would instead buy off a chain-free buyer as your purchase isn’t dependent on your sale.
- Know the exact amount you can afford – As you will have already sold your property, you will know exactly how much money you have to spend, and your offer on another property won’t be dependent upon hoping to get a specific price for your property.
- No extra taxes – As there will be no crossover between houses, you won’t have to pay any additional Stamp Duty or Capital Gains Tax.
- Less likely to be gazumped – Once again, as you’re a chain-free buyer, it’s unlikely you will get gazumped as most sellers would rather sell to someone who doesn’t have a long chain behind them (we’re talking property chains, not literal ones!)
- Develop a good relationship – When selling your property, you’re able to develop a good relationship with your estate agent, which will be of benefit to you when you’re looking to buy a property, as the estate agent will likely send properties directly to you as they’ll be aware of what you’re looking for.
Cons Of Selling A Home Before Buying:
- May be stuck renting – You may find that after selling, you’re not able to quickly find a property that you want to move into, which could leave you stuck renting for longer than you want to be.
- Hot market – If you’re in a market where prices are rising fast, by the time you’ve sold your property and are looking at purchasing a new one, the house prices on the market will have risen, making buying a new house becomes even less affordable.
- More expensive – By this, we’re referring to the removal costs = if you’re moving twice, you will need to pay for removals twice, making it more expensive.
- Commitment – When renting, you must commit to a set amount of time. During this time, if you find a property you like, you will still have to pay for the rent even if you move out.
3 Tips For Buying And Selling A Home Simultaneously
When you are looking to sell your home, the selling and buying process can seem like you’re running a hurdle race; if you use the following tips it will help you tremendously!
#One: Instruct Solicitors or A Conveyancing Service ASAP
If you can find and instruct solicitors or conveyancers as soon as you look to sell or buy a house then this can free up a lot of time and stress later down the road. Also, if you are selling as part of a chain, it can help minimise the risk of the property falling through.
#Two: Use An Online Estate Agent For A Smoother Transaction
If you use an online estate agent to sell your property, it may benefit you significantly as you will have less stress as the estate agent will negotiate and handle any onward purchases for you. They will work with the solicitors to tailor a schedule around you and your plans and make sure everything is on track.
#Three: Try To Match Up Your Completion And Moving Out Dates
When you find a buyer for your property, you should try your best to make sure the completion date and your moving out date are either on the same day or very close together. This will minimise the expense you pay putting your belongings into storage and make the entire process move more smoothly.
Should You Sell Your House Before Buying?
Ultimately, there is no right or wrong answer here, and we’re all going to have different opinions. The correct answer for you will also be dependent upon your situation and what the market is like.
We know you may be looking for a more definite answer than that so we can give you our opinion. Considering the pros and cons, it’s better to sell before you buy if we were to choose.
Why?
It also allows you to keep one eye on the market whilst selling your property, just in case your ‘dream home’ pops up.
Well, that’s everything you need to know about buying and selling houses in a less traditional process, including the critical answer to ‘should you sell your house before buying? What do you think? Is it a better idea to buy or sell your house first? Or is it easier to do it all in ‘one go’? Don’t hesitate to get in touch with us today!
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Millie is a perfectionist with a passion for property and writing articles. You’ll find her researching the latest housing trends and the newest up and coming areas worth investing in. Read more about Millie here.
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