Guide To Selling and Buying A Home At The Same Time

Selling a property can be seriously stressful – and so can buying one straight off the market. With both processes, there can be a lot of paperwork and agreements involved, and without the right advice, there’s a lot of room for error that can string out the process even longer or even result in you losing money.

Should I sell my house before buying a new one?

Selling your house before buying a new one, can definitely be advantageous, but you’ll have to be super organised and make sure everything is in place in order for you to complete the process one after the other, rather than buying and selling at the same time.

Benefits of selling your house before buying a new one

Non-sale dependency: If you put an offer in for a home but you have some competition, the seller and their estate agent will often favour your offer as you’re “non-sale dependent”. As you don’t have to sell your home in order to buy theirs, you are offering a more stable and easier offer.
Easier to get a mortgage: Brokers and providers will be more likely to offer you a mortgage if they don’t have to service your old one. Once you’ve sold up, it’s a simpler process to just apply for one new mortgage, than have an old one that needs to run over.
No onward chain: Just as no-sale dependency is attractive while buying, a no onward chain is attractive when selling – buyers of your home can simply purchase your home without waiting for your next purchase to be complete.
Less stress: If you’re not completing two big processes at the same time, as you would when selling and buying a house at the same time – it’s likely you won’t be as stressed. Plus, if you’ve completed the sale of your home before you begin looking for a new one, put more thought into the next place you want to go.
Maximum bid: When selling and buying at the same time, it can be a little tricky – you don’t know for sure the maximum bid you can afford. If you sell up beforehand, you have the amount in the bank and know how high you’re willing to bid.

Disadvantages of selling your house before buying a new one

Finding accommodation: One obvious factor of selling before buying is accommodation. Once your house is sold, you’ll need to find somewhere to stay until you buy a new one. This will usually involve staying with family or renting – but bear in mind six months is usually the minimum contract term for this, and rent amounts are higher than mortgage payments
Accepting offers: Without looking towards a home you want to buy, you can often find yourself in a longer selling process, trying to receive the best offer – rather than taking one that would allow you to move on. While you may end up with more cash, the process can be drawn out and essentially unnecessary
Rising house prices: If you decide to sell first, instead of buying and selling a house at the same time, it might be a while before the perfect property crops up. You could find yourself settling for a property that’s not quite right – or being prices out by rising values by the time a great property comes along.

The process of selling and buying a house at the same time

It’s common for homeowners to sell their current home and buy a new one at the same time – but if it’s your first time, it can be a confusing process to navigate.

Arguably, buying as part of a house chain is the most complicated way to move home – but don’t worry – we’re here to break down how exactly the process works for you:

Get your property valued
Assess your property’s equity and review your finances to figure out what exactly you can afford
Ask a mortgage broker what’s available to you in terms of your old mortgage and a new one
Put your house on the market and begin your property search
Choose your next home
Put an offer down on the home – this will only usually be considered if someone has placed a bid on your own home beforehand
Have a property survey
Discuss the survey and any issues with your broker
Employ a conveyancing solicitor to conduct property searches and contracts
Involve your estate agent and instruct them to nudge the process along
Get a completion date for both your sale and purchase; this is the date that you will be moving out from your current property and moving into your new property.

When buying as part of a house chain, offers and bids on your own home can often determine success. The admin processes are often quite long too.

Potential problems when buying and selling a house at the same time

Buying in a chain can present some tricky issues – when you buy and sell at the same time, you rely on someone buying your home in order for you to afford buying another house.

Here are some common issues that can arise when buying and selling a house at the same time:

Cold feet: The most common issue is people changing their minds. This can be extremely frustrating, but it’s a pretty common occurrence. When buying in a chain, you can’t buy your new home until the sale of your current one is in place.
Mortgage issues: If you’re buying and selling at the same time, mortgage agreements can become complicated and they can often take longer than expected.
Bidding: A huge number of buying and selling issues start with bidding. For example, the power of your own bid depends on sale dependency, onward chains after offers, or you are being outbid while someone has a bid on your home.
House chain delays or breakdown: Any delay from the bottom of the chain ripples all the way up – so be prepared for your completion date to be delayed as part of selling and buying your house at the same time. This can be frustrating, but it’s one of the main issues involved when relying on other transactions when moving to a new house.
Survey findings: If a survey of any of the houses in the house chain – including the one you’re selling or buying – is discovered to have unforeseen yet serious and expensive issues, this can have a huge impact. It’s likely to cause large delays at the very least, or for that property to be taken off the market entirely, causing the chain to collapse.

FAQs

Can you buy and sell your house at the same time?

Yes, it’s possible and completely common to buy and sell your house at the same time – but the process is often a little more complicated if you choose to use a traditional estate agent and join a house chain.

Is buying and selling your house at the same time more expensive?

On paper, buying and selling your house at the same time can be more expensive due to some of the unique fees that can crop up – but, it’s also important to factor in the costs of temporary accommodation if you decide to sell first and then buy.

What happens to my mortgage if I buy and sell at the same time?

If you have a mortgage but want to buy a new home, this can often lead you to consider buying and selling a house at the same time – though it really depends on your mortgage terms whether or not this is the right choice. Sometimes mortgages are portable and can simply be transferred to a new home – but that is subject to checks and can always be declined.

If not, you might have to pay off your current mortgage early, and then set up a new one for your new house – but this can sometimes result in an early repayment charge.

I hope this post is useful to you. Please do let me know if you have anything to add, and I will gladly consider it and add to the article if it helps my readers and don’t forget, if you need further advice/assistance or would like to reach out you can find my contact details below.

Josephine – Your Trusted London Property Partner

Tel : +44 (0) 7491 430055

email: josephine@josephinedayan.com