If they put their home on the market, it might sell quick and then they might find it impossible to find another home in a short period of time. Alternatively, if they find a home they’d love to buy, they realize they could lose out because their current home won’t sell quickly enough or the sellers won’t wait.
What is the best approach? In my experience there is seldom a “right” answer for everybody and every situation, but let’s just look at a few options.
Let’s say you decide to put your home on the market first because you want to be sure of the amount of money you’ll have to work with. You and your Agent can negotiate a longer settlement for your contract in order to give more time, once you have an unconditional contract, to go house hunting for your next home. Thirty days is typical for a contract in Queensland, but I’ve seen periods of time at lengths as long as sixty, ninety, or even one hundred twenty days. As long as all parties agree there is no time limit for a property settlement.
Check with your Bank or Mortgage Broker if you could apply for a home equity line of credit before you put your home on the market. If you have a significant amount of equity in your home, this can provide you with the deposit for your new home. You can then shop around and sign a contract maybe “subject to the sale of your current home”. If the seller does not accept the clause or if you are in competition with another buyer who does not have a “sale of home” requirement, you could choose to remove the clause and exchange it to a “sunset clause”. Check with your solicitor first before signing a new contract for a property to make sure the contract conditions suit your needs.
Let’s explore another possible scenario. You decide you’ll do some preliminary shopping for your new home “just to see what’s out there.” However, you “fall in love” with a beautiful home but the seller will not accept any contract clauses .
Is there any way you can avoid losing out on the purchase of this home? It isn’t cheap, but if you have good credit and a lot of equity in your home, you can probably get a bridge loan to buy the home you fell in love with. Generally bridge loans have a high rate of interest and are for a period of six months. Speak to your Bank- manager first, to see, if this could be an option for you.
As always, there are many choices and I only mentioned some of them here. If you like to start the process by finding out “How much is your home really worth”, please feel free to contact me direct on 5476 2772