The current property market is looking quite bleak around the entire country. There is more supply than demand currently, meaning that it’s a buyers market. This can be great if you’re thinking of purchasing a new house, but there may be some things that could trip you up when it comes to selling your own.  

In this article, we’ll discuss what the selling process involves, what the buying process involves and a top tip from our Founder and Mortgage Broker, Jeff, that might just save you from a very costly mistake and help you navigate this significant transition smoothly. Let’s get into it! 

First Things First – Should I Buy My Next House First OR Sell My House Before Buying? 

What human nature LOVES to do is secure the next house before selling the first. Let’s say you’ve seen something that you love, you let your emotions get the best of you, and you put in an offer – after all it’s a steal in the current market. Now you’re thinking “I’ll surely get this price for my house, so everything will be fine!” But then the only offers you get on your house are $100k less than your expectations and you have to sell, or worse, you can’t find a buyer at all as you’re selling in the same market as you’re purchasing in. There’s a very high failure rate in this market when buying a house ‘subject to house sale’.  

1. Preparing to Sell Your First House 

Get Pre-approved for your next Mortgage 

The first thing you’ll want to do before anything else, is to ensure you are in the financial position to purchase your next house. Approach your mortgage broker to get pre-approved for a home loan. This gives you a clear idea of your borrowing capacity and strengthens your position as a buyer. Pre-approval can expedite the buying process, making you a more attractive candidate to sellers. Ensure you have all necessary documents, such as proof of income and credit history, ready for the application process. 

Evaluate Your Property 

Start by assessing the condition and value of your current home. This involves checking for necessary repairs and considering any improvements that might increase its market appeal and add value. A professional valuation can provide an accurate estimate of its worth. This step helps you understand what price range you can expect, setting realistic expectations. Small investments in maintenance, such as painting walls or fixing minor issues, can enhance your property’s appeal. 

Choose a Real Estate Agent and Lawyer 

Selecting a knowledgeable and reliable real estate agent is crucial. A good agent can help you set a competitive price, market your property effectively, and navigate the legal aspects of the sale. They’ll also provide insights into the local market trends, helping you make informed decisions. Interview several agents, check their track records, and choose someone you feel comfortable working with and who you can trust. A lawyer with coordinate the sale and purchase agreement between you and the vendor when the time comes and will work to keep you protected from potential legal issues that may arise.  

Decide How You’d Like to Sell Your Property 

There are several different options for how to sell a property which your real estate agent will take you through. The most common are: 

• Selling by deadline sale 

• Selling by auction 

• Selling by negotiation 

• Selling by tender 

• Selling by an advertised price 

Talk with your agent about which is the right approach for your property based on your needs – are you needing a fast sale due to a change in circumstances or is receiving the highest possible offer for your property the most important thing to you? You may have a preference in mind, but it’s worth listening to and considering alternatives. 

List Your Property 

Your agent will list your property on various platforms, highlighting its best features. High-quality photos, detailed descriptions, and possibly a virtual tour can attract potential buyers. A well-presented listing and investing in home staging can make a significant difference in drawing interest from prospective buyers. Your agent may also use social media and their network to spread the word if they have a good following.  

Open Homes and Viewings 

Prepare your home for open homes and private viewings. This means keeping it clean, decluttered, and well-presented. Your agent will handle the scheduling and guide potential buyers through the property. Creating a welcoming atmosphere can help buyers envision themselves living in the space, increasing the likelihood of receiving offers.  

Receive Offers 

When offers start coming in, your agent will help you review them. Consider the offer price, conditions, and the buyer’s ability to complete the purchase. It’s essential to assess each offer carefully, weighing the pros and cons before making a decision. Sometimes, a slightly lower offer from a more reliable buyer can be a better option than a higher offer with uncertain financing. 

Accept an Offer 

Once you accept an offer, both parties will sign a Sale and Purchase Agreement. This legally binding document outlines the terms and conditions of the sale. At this stage, your lawyer will ensure that all legal requirements are met, safeguarding your interests throughout the process. Be prepared for a 5-10 day clause prior to the settlement date during which time the buyer may conduct further checks such a LIM reports and Builders reports. 

My top tip is to put your own house on the market first, using a three-month settlement date – by then you’ll know how much money your house is settling for and you can then go make offers on other houses. Make sure that the settlement date is the same for both contracts as you can then use the money from the sale of your first home to purchase your next. 

If you’re in the position where you unfortunately have to own two houses at the same time, you can potentially get bridging finance. Bridging finance is designed to help you buy a house before you’ve sold your current one. You can apply for bridging finance for a period of up to 6 months, depending on your bank, however this is not guaranteed. During that period you pay your current mortgage, plus interest-only on the new house – subject to the bank’s approval. This, however isn’t ideal due to high interest rates currently, but can be applied if necessary.