Should I Look Before I List?
Mon 18 Apr 2022
Beth Bromilow, Valuations & Marketing Support
Should I look before I list?
Buy first or sell first? The chicken or the egg? This is a classic mover’s dilemma, and is particularly rife in this slow moving housing market. Coordinating the sale of your current property with the purchase of your next one can feel like an impossible challenge, but if you’re thinking about making a move it’s something you should be savvy about.
It’s understandable that you would want to hold back from selling your current home until you’re certain you’ve found THE house. You don’t want to be chased by a buyer wanting to know when they can move in, before you’ve found anywhere to move out. But what happens when you’re too slow selling up and the new home you’ve set your heart on is snatched up by another buyer?
While the allure of that dream home may be hard to resist, taking a strategic approach to moving house offers numerous benefits. From financial clarity and negotiation advantages, the ‘sell first’ approach is the clear winner here. By prioritising the sale of your current home, you will create a streamlined process for yourself and the seller of your next home. You will be in a much stronger position to snatch up THE house, when you do find it, if you’ve already sorted selling your current house and built the foundation of your move.
Ask yourself: Am I browsing or am I buying?
If every person looking to move house decided not to list their house until they had found something to buy, there would effectively be no properties on the market at all. The enormous demand for properties already isn’t met with the supply, and this causes a jam in the market which has negative effects on prices and the moving process. Listing your property first means you will help to keep the property market moving and potentially encourage the sellers of your next home to list their property sooner, so you can spot it sooner! Being present on the market, and allowing prospective buyers to get a taste for what you can offer them, buys you more time to research into your next home and plan your next steps.
So what are the steps?
You should have an accurate valuation of your current property in place before you list it on the market. This gives you a guide price to organise your finances and budget your move around. You should also have spoken to a mortgage advisor to discuss the best deal for your circumstances. Before you list, do your research. Explore areas you want to move to and if the sort of properties they offer fit your wants and needs.
Keep an eye on the property market. You already know that you want to move, so keep your eyes peeled in case the perfect house pops up and stay up to date with what’s on offer.
Organise your paperwork. Seek financial advice and stay proactive to make processes down the line much simpler for yourself.
Make sure you get a pre-approval on your mortgage, if you will be needing a mortgage. This will not only save you time in future, but will make you into a more attractive and committed buyer when you come to make an offer on a new home.
Break free of the chain!
Most people try to sell their current home at the same time as buying a new one, which forms a property chain. Being able to offer a chain-free transaction will immediately place you in a stronger position as a buyer, especially if a seller is looking for a quick sale.Many sellers will only consider offers from chain-free buyers or those who have already accepted offers on their existing houses. If you’ve not yet sold your house, you won’t be able to offer a seller any indication as to when you can move forward with the purchase, as you yourself have no idea how long it may take to sell your property. Any offer you make whilst still retaining your existing property is unreliable, as you’re not immediately able to progress.
Sell your house - sell yourself
Selling first allows you the strong position of making offers on a property whilst already having a buyer secured for your current home. It’s very unlikely that a homeowner would accept an offer from a buyer who has a house to sell, but hasn’t done anything about selling it yet. Putting your property on the market proves that you’re serious about moving, and therefore more reliable and attractive to sellers. In a seller’s market, where there are more buyers around than there are properties, and these buyers are all in competition with each other, a seller is less likely to entertain an offer from a buyer who hasn’t yet sold, or even listed, their existing property.Show them the money
Selling your current home before buying a new one puts a lot of cash in your pocket. With money from the sale in hand, you’re in the perfect position to make a strong offer on your dream home. Sellers love a buyer who’s cashed up and ready to go, so why not bump yourself to the front of the queue?
Having already sold your current house, you are able to proceed quickly, and will have cash in the bank or a pre-arranged mortgage offer in place. This is very attractive to sellers and gives you an edge over others who are still in a property chain. If you have already sold your home, or have a firm offer in place, you are in a much better position for bargaining. Sellers may be more likely to accept a low offer from you as the sale isn’t dependent on you finding somebody to buy your existing property. You may also make more money on your own sale, as selling first releases the pressure on you to make a quick sale by reducing your asking price, leaving you able to hold out for someone to offer higher.
With availability low and competition high, you want to be the buyer that stands out from the crowd. Selling your home ahead of time shows you mean business and you’re ready to make a move.
Jump the queue
If a property is getting a lot of attention on the market, as many of our dream homes often do, sellers are unlikely to let you even view the property until you’re in a proceedable position. Once you’ve accepted an offer on your current house, you’ll be ready to move forward with a purchase and able to view any property that catches your eye. Selling first gives you more negotiation power, which comes from your ability to commit to the purchase and move quickly with the sale. If you make a decent offer and already set up to proceed, sellers are potentially less likely to consider other offers, even if they’re higher than yours, that come with a chain or a wait on progression.Mitigate the risks
Until you’ve sold your current property, it would be risky to move forward with the legal aspects of buying another house. As soon as the formal processes begin, there will be costs involved. If you’re unable to sell your existing property, or fail to achieve the expected asking price for it, or the sale falls through, then you will have wasted a lot of money.You have nothing to lose with your property already on the market and under offer, and everything to gain. You can be honest with your buyer about the sale being subject to you finding your next home, and accept an offer on this basis, without beginning the legal or mortgage processes until you do find that dream home. This way, no expenses are incurred for you or the buyer of your house until they need to be.
If you have already sold your house, estate agents can try to slow down the sales process by negotiating the period between agreeing offer and exchanging contracts, to allow you more time to buy a new home. A large percentage of house buyers are in rented accommodation which means they can be more flexible and wait longer before moving in. If your buyer is happy to give you more time, you can agree the sale and take the property off the market.
Yes, there are disadvantages, but…
Worst case scenario, you may end up renting for a short period whilst you settle everything with your new property, or you may have to place your furniture and belongings into storage for a time whilst you wait to move in, but through discussions with your moving team and your buyer, this can all be avoided and the process can move smoothly.
If there is an extended gap between selling your old house and buying your new one, property prices could increase and you could get less for your money. However, in this time property prices may also decrease and you could get more for your money.
Most people financially need to sell their current property before being able to purchase a new one. Bridging loans are an option available to you but come with large interest rates and can be hard to get accepted for in the current economy. If you buy a new house before selling your old one, commit yourself to the purchase in a slow market and then fail to sell, you could find yourself in breach of a contract or juggling two mortgages or a complicated loan. Homeowners can be under pressure to sell quickly and reduce their asking price in order to move house quickly, which could result in less equity from the sale of the old home to invest into the next.
The pros far outweigh the cons!
The decision to list and sell your current home is a move that offers undeniable benefits. By prioritising the sale of your existing house, you gain financial clarity, negotiating power, and done correctly, more time and freedom to browse the market for THE dream home. You will be positioned as a credible buyer in a competitive market, and a strategic and sensible buyer in a slow market. Ultimately, you will set yourself up for a smoother and smarter transition into your next home. List before you look!
I hope this Article is helpful to you. If you are considering bringing your property to market, please don't hesitate to contact me directly.
p.s. Are you curious about what your property could be worth? Find out in around 53 seconds. Click here.
p.p.s. Download our eBook on how to get the best selling price for your property by clicking here.