Making a house offer before you sell your house is possible. However, this is a risky approach.
During the process of accepting a property offer, most sellers will take into account offers from chain-free buyers or buyers who’ve already accepted offers on the properties they own. If you haven’t sold your existing house, it may be challenging to offer the property seller any assurances regarding when you’ll be comfortable moving forward with the purchase. This is because you have no idea how long it may take for you to sell your house. There are ways that you can sell a house fast, visit this website to find out more.
In reality, all offers you make to sellers while you still reside in your house are hypothetical offers. Sellers are often hesitant to move forward with the sale of a property if a buyer isn’t prepared to close the deal immediately.
In this guide
- Advantages of accepting an offer from buyers on your existing house before making an offer on a new property.
- Do market conditions impact the process of making a house offer prior to you selling your property?
- I’ve found my dream home โ is it possible for me to buy it before selling my existing property?
- Advantages of accepting an offer from buyers on your existing house before making an offer on a new property
- Accepting an offer on your property gives you the freedom to view any property you like. Many sellers and realtors will let you book house tours once you’ve found a buyer for your current property. This is particularly true in a market where buyers are more than the properties listed for sale.
- After accepting an offer for your current home, you’ll be ready to proceed with a property purchase. This allows you to view any property you like and decide whether to buy it or not.
You’ll have more power to negotiate
If you are thinking about making an offer on a property before selling your current property, consider the negotiating power you’ll have to bargain for a fair buying price. As a chain-free buyer, or if you have already accepted an offer from a prospective buyer for your property, you’ll have more negotiating power since you can commit to buying the property. If you haven’t found a buyer for your current property, you won’t have a lot of negotiating power. Even if you reach an understanding with the property seller regarding the price, the seller will be inclined to withdraw from your agreement if another buyer shows up.
The property seller will take you seriously
A seller may not take you seriously if you make an offer on a property while you still have a house. This may also impact any other offers that you make on the property you want after you sell your current home. If you want a seller to seriously consider your offer with those of other prospective homeowners, it’s advisable to sell your current home first.
It helps you to secure your next property
Gazumping โ the process of making a higher offer for a property when the seller has already accepted someone else’s offer โ is growing. Additionally, roughly one-in-three house sales will fail after an initial agreement. Making an offer for a property you want before selling your current home implies that the odds aren’t in your favor. You need to do everything in your power to make sure the sale of the property doesn’t collapse. This translates to making the selling process as swift and stress-free as possible for the property seller. This may not be possible if you are still looking for a buyer for your current property.
You’ll have a chance to properly budget for your next home
Before selling your current home, it’s hard to estimate the amount of cash you need for your next home. This becomes possible once you’ve sold your property. Your current property may sell for more than you’d imagined, which may push you to consider buying a more expensive property than what you’d originally budgeted for. Alternatively, you may be forced to sell your house at a lower price to attract a buyer. In this case, you may have made an offer that you may not meet since the property may be unaffordable.
You can proceed with your purchase
You should complete the sale of your current home before you move forward and buy a new house. Remember, the legal aspects of buying a new property can be extremely risky. Once the formal conveyancing process kicks off, costs will be involved. If you can’t sell your current home or are unable to find a buyer who matches your asking price, and the purchase of the property you like collapses, you’ll end up wasting the money you’ve paid.
Do market conditions impact the process of making a house offer prior to you selling your property?
The brief response is yes, market conditions can.
In a seller’s market that’s saturated with more buyers than properties, a seller won’t entertain an offer from a prospective buyer who still owns a piece of property. In such a market, buyers are in constant competition to buy desirable properties.
In a buyer’s market, a seller may be open to considering your offer since there is an influx of properties. Still, they may set a deadline for you to get a buyer for your current property before they can move forward with the sale of the new property. When making an offer, remember that a seller who considers your offer even before you sell your current house may decide to jump ship and deal with another prospective buyer. This is mainly because nothing is legally binding during the sale of a property until contracts are exchanged.
I’ve found my dream home โ is it possible for me to buy it before selling my existing property?
If you’ve found a property that you’ve completely fallen in love with, but haven’t found a buyer for your current property, there are various options you may consider.
Bridging loan
A bridging loan is short-term financing that can help ‘bridge the gap’ when buying a new property. It assists in bridging the gap between the sale price of a new property and a buyer’s mortgage. This loan can help you buy your new property while you wait to sell your current house. It is a secured loan, implying your property will be at risk if you default to repay the loan. Before undertaking this commitment, make sure you put a lot of thought into all aspects of the loaning process.
Cash house buyer
If affording a bridging loan and mortgage repayments seems too challenging, or if you want to avoid the pressure of dealing with two properties, consider selling your house to a cash home buyer. Cash home buying companies don’t rely on financing from banks or investors to buy homes. They can buy your property in a week’s time, or on the date that you prefer to close the sale of your house.
Rent out your current house
If you are having problems with the sale of your current house, consider whether there’s an option to modify your existing mortgage to a buy-to-let mortgage. This allows you to keep your current home as a rental property. Nonetheless, you’ll have to come up with a deposit to purchase your new house. You should have avenues to raise the deposit without listing your existing property for sale or dig into your savings to finance the deposit.
Making an offer for a new house before selling your current property is possible. However, you’ll find yourself in a less powerful position than a chain-free buyer or someone who has already sold their property. If you are committed to buying a new property that you want, it’s best to put yourself in a proceedable standing before you make an offer for the property. This gives you more negotiating power, and sellers will also take you seriously.
