Brent Bastin: Should you sell first or buy first?

Brent Bastin

Sell first or buy?

Age old question of which comes first — selling your old home or buying your new one?

This really is the age old question. However, there are some things you must watch out for in order to ensure you sell your home for a premium price and buy well.

I have noticed that the right answer is often not the obvious answer. So here goes:

1 Buy a home 'conditionally' and then try to sell your home within the 'conditional period'. The most common fear is selling and having nowhere to go. Some people favour the idea of finding a house and negotiating to buy it, before selling their property by inserting a subject to sale clause. This means they have to sell their own home within an agreed timeframe to complete both deals. However, if you are looking to buy a home that is in demand, this won't work. This is because agents and owners will quite rightly choose to negotiate with buyers who are not encumbered with a house to sell, as it can be a risk.

The owner may be able to use your offer to obtain a higher price from the market, but you still miss out on the home.

2 Buy a home 'unconditionally' and then sell your home — potentially risking owning two homes. This can definitely work, if you can afford it. But I would not recommend this unless you are certain it will not cause you any emotional or financial stress. Banks provide 'bridging finance' for this purpose, but for many people selling a home is stressful enough without having to worry about having a huge loan to the bank, if you struggle to sell. For the lucky few who can pay cash on their next home, it can work.

3 Finally, you can sell your home first, then buy your next home. With this there is always the possibility of having to move twice or not finding 'the one'. The key here is to negotiate the longest possible settlement (eg. three to four months). This allows you ample time to find your next home and marry the two settlement dates up together. You then know the exact amount you have to spend on your new home with an added positive of being a cash buyer. We all know that money talks and cash is king.

It is very important to remember that you can buy any house that is on the market, including auctions, which only allows cash unconditional buyers.

Your focus should first and foremost be on maximising your sale price. In my experience people usually get frustrated with missing out on homes and eventually decide to sell first anyway.

Brent Bastin is a successful real estate salesperson, mentor, international speaker and business owner at Tremains Real Estate Tauranga. Find Brent via Instagram (@brentbastinrealestate) or Facebook (brentbastinrealestate).