Blog
To Buy or Sell First?
By: Laitiah Huynh
June 07, 2022

If you own a home and want to move on, you'll have to decide whether you should buy your new home first or sell your old one first. Here at Lands, we look at the advantages and disadvantages of both methods to help you decide which is best for you, whether you're upgrading, downsizing, or simply transferring.

The pros and cons of selling your property before buying a new one:

You'll know exactly how much you can spend on your future home if you sell your home before you buy. This means you can go into the transaction with a level of assurance that will set your mind at ease. Also, if you sell before you buy, you may not be under as much pressure to sell your current home quickly, which might provide you more leverage when negotiating a sale price. It can also allow you more time to look for your future house, especially if you can negotiate a longer settlement period.

There are various disadvantages to selling before buying too. You'll need a place to reside once your house is sold. If you can't locate anything during the settlement period, you may be under pressure to buy your next home quickly. It could also mean purchasing a home in a different market, which could result in paying more for your next home if property value begins to rise.

When selling first works best…

  • Property prices are steady or start to decline.
  • You’re relocating and buying in a different market.
  • You’re able to arrange for a longer settlement period. 
  • When you have certainty about how much you have to spend on your next home. 

The pros and cons of buying a home before selling your own:

Purchasing a new home before selling your current one is often a riskier proposition. It means you're depending on a rapid sale of your current house to fund your new buy, and if you can't close on both properties at the same time, you may need to take out a costly bridging loan, which is essentially a mortgage on two homes rather than one.

In a rising market, however, buying before selling can be a good strategy. It allows you to lock in today's prices for your new home while also allowing you to sell your current home at a later period when prices are predicted to rise. It also allows you to search for the ideal property before committing to selling your existing one.

When buying first works best…

  • There is a lot of competition in the market.
  • Property prices are rising.
  • There is a high level of demand for your existing property. 
  • You can negotiate a longer settlement term or make your purchase conditional on the sale of your home.
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Written by
Laitiah Huynh
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