9 Costly Mistakes to Avoid When Placing Your Home for Sale - Part Five
Buying Before You Have a Buyer for Your Property.
Even if you have your home on the market already, resist the temptation to start looking for your next home immediately, especially if you are using the equity in your existing home towards the purchase.
You may find a home that you fall in love with and if you enter into negotiations, you might be basing your purchasing power on an overprice expectation for your property. Until you have a buyer, who is prepared to put in an offer on your home, you cannot know the exact amount you will have available for the move.
A much more disappointing outcome is that your purchase goes ahead, with a condition that you have to sell your property to complete the transaction, you can’t get a contract on your property before the due date and all your planning, time, effort and costs have been wasted plus the huge disappointment of not getting the home you wanted.
Hopefully the following scenario never happens to you, but I can verify that it does happen. Someone finds a home that is perfect in every way, immediately negotiate a contract to purchase, sign up conditionally on the sale of their property, get lots of interest but no actual contract by the due date, and based on the interest in their home so far, take that as a sign that a sale is imminent and declare their contract unconditional and are then faced with having to pay for bridging finance until theirs sells.
And if it doesn’t?
Any financial advisor will recommend that you always make sure that you have enough funds available to fulfill any purchase you wish to make, whatever it may be. A home is no different, and the wrong decision has cost some people many thousands of dollars. Please don’t let it happen to you.
To find out exactly what funds you will have available to you before you purchase again, you need someone to say to you “I will buy your property for $XXXX” then the decision is a simple process;
Work out how much you will have available to purchase your new home based on the figure the purchaser mentions.
Go and see if that amount will allow you to make the move that you wanted i.e. go find a home to buy.
Prepare agreements each conditional on the other (take legal advice on this) and
In my first article in this series, I talked about getting the asking price right. This can take time and you will only know when you have got it right when you start to get offers. This is what you need to aim to get as soon as you can so you can start planning.
Remember, you don’t HAVE to take any offers at all, but you do need them to accurately determine if this move is going to work for you. If it isn’t, then stay where you are, don’t get caught with two mortgages.
Real Estate can and should be reasonably stress free, but some is inevitable, don’t unwittingly increase it by purchasing before you have sold.
This is part five of a nine part series for home sellers.
Maggie Dixon Real Estate