It is the age-old question, should you buy before you sell, or sell before you buy your dream home?
Here we look at 7 reasons to sell your property before buying and why, in the current property market, getting your property valued and listed with a local estate agent, to sell before you buy, may be the best option for you.
The current property market is very competitive
Currently we are seeing large numbers of buyers competing over a limited supply of property on the market. As highlighted in our spring issue of Market Insight, over the course of the pandemic a total of 275,000 homes have been missing from the sales market in comparison to the previous 12 months, which means house hunting has become an increasingly competitive activity.
In May, the average home also went under offer after just 44 days, this is 35 days quicker than in 2019.
Across towns and villages throughout the country, which have been at the top of a growing number of buyers wish lists, there are 20% fewer homes for sale than a year ago.
By putting your property onto the market, you can ensure you are in the best position to sell your property and buy your dream home.
Reduce the number of people in the property chain
Nobody wishes to be part of a large, unwieldy property chain which, with so many different parties involved, could potentially scupper your own property sale and onward purchase. By putting your property onto the market and selling before you buy, you are eliminating a part of the property chain.
Get your finances in order and know your budget
If you are lucky enough to sell your property and release the equity without the need for a mortgage, as a cash buyer, you can move quickly once you find your perfect home and will be a very attractive buyer to potential vendors.
Get a mortgage decision-in-principle
However, if like most of us, you do still need a mortgage to secure your next home, whether you are upsizing, downsizing or relocating, then you will have a good idea of what you can sell your property for following a valuation from an estate agent. This means that you can start the process of speaking to a mortgage broker, who can assess the market and secure a decision-in-principle for you. Knowing your budget and having this in place means you are in control of your property purchase.
Avoid paying Stamp Duty on a second home
Stamp duty on a second home
If you sell your main property before you buy, you can avoid the stamp duty on a second home.
You may not have considered the fact that if you buy a new home while you own your existing residence, you will be eligible for stamp duty on a second home. Whilst, you can claim a stamp duty refund once you sell your main residence, you will need to have the funds available to make this payment upfront. Check out our useful Stamp Duty Guide or use our stamp duty calculator to see what payment you may have to make.
Claiming a stamp duty refund
It is also your responsibility to organise the refund and you are only eligible if you sell your property within three years. You will need key details and information about the sale and may need to engage a solicitor and an accountant to assist with the paperwork. This will all need to be completed via the HMRC website.
If you sell first, you won’t have this problem or have to spend time doing all of the admin to claim your refund.
Stay in control of your sale
You will be in control of the sale of your home. You will not be under pressure to complete the sale too quickly and to a particular deadline, which also means you should be able to achieve the true market value for your property. You will also be in a stronger negotiating position.
You will be a much more attractive buyer when you are ready to purchase your new home.
All estate agents should do their due diligence in qualifying any buyer and buyer’s offer which they put forward to the vendor. If your house or apartment is under offer or already sold, your offer to buy a new house will be taken much more seriously by the estate agent and the vendor. Thereby reducing the risk that your offer will be declined or the sale will fall through at a later stage.
Get access to off-market property by registering with your local estate agent
As well as registering with your local estate agent to request a valuation, it is also an important step to take to find your new home.
At Hamptons, a significant number of properties are sold and let off-market, which means that if you are not registered with us, you could miss out on your dream home. Some vendors prefer not to market their property in the traditional sense and don’t wish for it to appear across the property portals or indeed on our own website.
In the current climate, due to the property market moving so quickly, it is easy to miss out if you are not registered with a local agent. With 9 buyers to every new property (instructed) for sale and 7.9 tenants to every property to rent, you need to be registered to have the best chance of securing a new home.
You may also like to read:
Market Insight Summer 2021
The Stamp Duty Guide
Rural houseprice growth outstrips the urban average