It’s the age old question – when moving home do you buy or sell first?
When recently asked this question by a journalist you’ll see below I have strong views, and interestingly they are the exact opposite of the president of the Real Instate Institute of Australia
Here’s the article that appeared on news.com.au
HOMEOWNERS usually reach a point when they outgrow first homes and need to upgrade.
You have done it all before, right? How hard can it really be?
According to experts, buying a second or even third home can often be as fraught as buying the first one.
“Buying your next home can be a daunting task, it’s extremely exciting but full of complexities,” said property expert Michael Yardney, of Metropole Property Strategists.
“One of my best tips — no matter where you are buying — is do not be influenced by ‘the market’ more than by your own needs.
“Waiting for the ‘right time’ or for prices to go down is gambling with your family’s future.”
Fortunately with careful planning, understanding what you can afford and knowing how to sell and buy, upgrading homes can be hugely rewarding.
RP Data national research director Cameron Kusher said upgrading homeowners were “one of the most active cohorts” of buyers this year.
Commonwealth Bank head of home loans Clive van Horen agreed upgrading homeowners were a big portion of the total borrowing market this year.
“Second- and third-time home buyers are a very strong segment, just behind the investors, and approaching this move in different ways,” Mr van Horen said.
“Some are upsizing by selling to buy bigger homes, some are topping up existing home loans to renovate or extend, some are downsizing the size of their homes to buy in preferred locations.”
Mr Kusher said the most important thing to keep in mind if upgrading in today’s market was that mortgage rates were at record lows.
“At some point in the future they will increase and as a result the interest component of the mortgage will increase, which inturn increases the cost of each mortgage repayment,” he said.
“The other factor to keep in mind is current and historic levels of capital growth in the housing market are not guaranteed to continue into the future … important considerations for any purchaser.”
If thinking of upgrading, questions to ask yourself include:
? How much equity do you have in your current home?
? Has my financial situation improved since my previous purchase?
? How have broader market values changed?
? Will I be buying and selling in the same market?
Ideal family home suburbs usually have good education facilities including primary and secondary schools and kindergartens, proximity to sports facilities and shopping outlets and generous block sizes, according to Real Estate Institute of Australia president Peter Bushby.
“My advice is always buy where it suits your family in the best location you can afford, and where you have the buying capacity,” Mr Bushby said.
The question of whether a homeowner should sell or buy first draws mixed responses from industry experts.
“Whether you can afford to buy first or have to sell first will come down to your financial position,” Mr Bushby said.
“But if you haven’t got capacity to buy before selling, your outlook is fairly difficult in most markets.”
Mr Yardney disagreed. The national property buying expert said for most people it was better to sell first and then know your exact budget.
“You can then purchase your dream home with confidence and don’t feel rushed to make a purchasing decision, at worst you can rent in the short-term until you find your ideal home,” Mr Yardney said.
“On the other hand if you buy first you’ll be rushed selling your property and may have to accept a lower price for a quick sale.”
Read more in the Herald Sun