Should I stay or should I go? When to buy, sell or hold

Saturday 26 May 2018

Most homeowners make a move from one property to another at some stage in their life and it’s one that leaves them asking plenty of questions.

 

The most common is, “should I buy or sell first?” because deciding to place your home on the market often sparks fears of being left without anywhere to go.

 

There are plenty of options but often they are time consuming and costly. Renting in-between ownership can mean two moves and being tied to a lease for a certain period. In a rising market this can leave you priced out, although in a falling market this can be smart if you are willing to accept the costs associated with a double move. Obtaining bridging finance can assist for the period between buying and selling, but can be costly when things don’t go to plan.

 

In today’s market (May 2018) we would recommend selling first because it gives you surety in the amount that you can spend on your new home, and enable you to be in a position to buy unconditionally and within your budget. It also alleviates the risk of paying two mortgages because if you buy first and then have trouble selling, you may be stuck with two.

 

Our advice put simply is that in a rising market it’s always better to buy first because you’ll be able to secure a home and then place yours on the market and perhaps achieve an unexpected bonus as the market rises. In a falling market it’s wise to sell first, because you might find that you get a good price when you sell but pick up a bit of a bargain as the market continues to go down.

 

The last option is to hold.  Often when the market starts to go down, people think it’s a bad time to sell. But we think it can be a great time to trade.  You won’t get as much for your home as you may have last year, but you won’t have to pay as much either for that forever home you’ve been priced out of for so long.  Waiting for the market to pick up can take years, because all markets work on a cycle and in every cycle there is a top and bottom. The trick is to buy and sell in the same market to avoid major fluctuations unless you’re working in a market where the cards might fall your way.

- Kate Webster