Advantages of completing your sale before you buy
“The process of selling and buying a house doesn’t get easier, no matter how many times you’ve been through it before. You’ve got to get your property valued, sort your finances, arrange viewings and that’s before you’ve even thought about looking for a new house yourself.”
WITH COMPETITION and demand for properties in the marketplace fierce, to set yourself apart from other buyers, one option is to sell your current home before you look for a new one. The process of selling and buying a house doesn’t get easier, no matter how many times you’ve been through it before. You’ve got to get your property valued, sort your finances, arrange viewings and that’s before you’ve even thought about looking for a new house yourself. When it comes to moving house, homeowners typically sell their current property at the same time as buying a new one. This is often the simplest, most cost-efficient option. But this approach has its downsides – most notably the fact that it creates a property chain. Here are some of the ways in which selling your home first could help you.
CUTTING DOWN THE CHAIN Long property chains can be a nightmare, as it only takes one weak link to bring down all the transactions. If a buyer elsewhere in the chain is refused the mortgage they asked for, or a seller takes their home off the market, every sale could fall through. The longer the chain, the slower the process will be, and the additional time involved makes each purchase vulnerable to gazumping. So, chain-free buyers are far more attractive prospects. If you’ve already sold your home, you may have a greater chance of your offer being accepted, even if it’s not the highest on the table.
PUTTING YOUR FINANCES IN PERSPECTIVE Selling your home before buying another takes some of the guesswork out of how much you can afford. You can get an Agreement in Principle from a mortgage lender based on the exact amount of cash you have, rather than an estimate of how much you’ll make from the sale. So, your chances of mortgage approval at the next stage are potentially higher. You might even have enough cash from the sale to buy a new home outright, which allows you to move much more quickly than a buyer who needs to seek mortgage approval. It also gives you access to properties only open to cash buyers, such as auctioned properties and those with short leases.
TAKING OFF THE TIME PRESSURE If you find your dream home before you’ve sold your current home, you’ll then be in a race to sell yours to avoid missing out. The time pressure can weaken your negotiating position and force you to accept an offer at a lower price than you’d like. In contrast, if you haven’t yet started looking at properties for sale, you can manage the pace of your sale however you’d like and wait for the right offer.
AVOIDING STAMP DUTY COMPLICATIONS Rates of Stamp Duty Land Tax (SDLT) are higher when buying a second property. This usually doesn’t apply if you’re selling your only home and buying another, but it can get complicated if you still own your old home when you buy the new one. Your new home will be considered a second property, with additional SDLT to pay, until the old home is sold. If it sells within three years, you can claim back the additional SDLT. Otherwise, you’ll lose the extra money you paid. By selling your property first, you could save time and money, and remove some of the stress of buying a new home.
FINDING A MORTGAGE DEAL THAT’S RIGHT FOR YOU Whether you’re stepping up, moving on or staying put, when it comes to finding competitive rates and a mortgage deal that’s right for you, we’re here to help. To discuss your requirements speak to The Official Mortgage Company – telephone 01777 809700 – email email@example.com.
Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage.