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Ok, so we've decided we need to upsize our house, as DD has completely taken over.
We're gonna put our house to Auction in about a months time, but of course we've already found something that DH wants to put an offer in for tonight.
Are we totally crazy for buying before we sell???? I am anxious/nervous at the best of times, so you can imagine I'm going into overdrive at the moment!
What have your experiences been, good or bad? Let me have it!
TIA :)
i guess if you can afford a bridging loan if yours doesnt sell before settlement then maybe but personally i would never buy before sellin
I wouldn't buy before selling myself.. We've had a contract fall over on ours before and then it took ages to sell again after that. I don't know what the market is like in VIC but it's damned slow here is QLD. But like Olive said, if you can afford a bridging loan then go for it
You can always make the contract conditional upon your house selling at auction, however be mindful that the vendors may not accept your offer.
MIL and her husband recently did this. Their old house sat on the market for ages and eventually they had to get a bridging loan. They are by no means poor but even they struggled and eventually had to settle with whatever offer got thrown at them. Not an ideal situation.
We bought before we sold due to the property market not having alot of houses on offer & when they were, they sold so quickly. We had been looking on and off for about 18 months. We had to take out bridging finance for about two months before our house sold & settled. We did make sure we had pre-approval though & told the Bank we might need bridging finance for up to six months, which they were happy with. GL
TBH, no way! Bridging loans are ridiculously expensive (i.e $1800 on top of your current monthly mortgage repayment at least) and it's dead money - you might as well flush it down the toilet. There is just too many ways for it to go wrong, especially with a month out before you even look at selling yours. The other thing is you might have to take an insultingly low offer on your house in order to get it to sell in time, which means that house is going to cost a whole lot more than the asking price in the end.
I know it can be hard, but buying a house should not be an emotional decision. If it's the right house it will still be there in a months time, if it goes in the mean time, there will always be other houses.
We SOLD our house in one day but STILL can not find a place to buy and that was in November! We are now living with my mum and Dad so It can get a little cosy but its cool. There are so many senarios you can go through... you may have an offer before it goes to auction or someone may want a longer settlement date. You need to be as flexible as possible and buying before hand really ties your hands up. Dont be in such a hurry too, how much do you like this new house? There really is so many places out there for sale you always find something else....always!
3 little words - dont do it!
Well i certainly wouldnt, even if it was the most perfect dream house. If its meant to be then it will happen (after your house is sold) and if not, something else will come along when the time is right.
Thanks for your responses so far girls. Pretty much what I expected to hear :(
It's just that DH is so gung ho all the time, and leaves all the thinking and logistics of it all to me.
Bridging is a possibility, but like you have all mentioned, I am not too keen on the expense of it. And Mel, spoke to our conveyancer today who did mention the condition you mentioned. I have never heard of that though, or anyone using it, so wasnt sure if that was a real possibility. Sounds like it is though, but as you say, will be a hard one to get past the vendor.
Thanks again all, you have given me much food for thought x
Be a bit careful and talk to your bank. We bought our new place before selling our old place but we took a calculated risk and even then the bank was a pain to deal with. We had almost $700K worth of equity in the house we were selling and our new place was only $535K so it should have been a no-brainer. On top of that, we were both earning good money. So we thought we would be home and hosed especially as the suburb we were living in had a 100% clearance rate for houses and had for the previous 12 months.
EVEN SO ... the bank was an absolute pain and refused to give us a bridging loan. Instead, we had to take out an investment loan on the new place. No idea of the logic behind that but that's why I'm telling you to talk to your bank first.
Also, explain the situation to the real estate agent. They would deal with this situation a lot and would have some ideas on what you could do in your situation with regard to contracts.
Even if you can afford the bridging loan I wouldn't hun. :( Thing is moving, selling buying is stressful enough when things go smoothly let alone throwing the stress of not selling your house in the loop. Plus as someone else mentioned you may be tempted to take the first offer you get just so you make sure you sell rather than waiting and getting the best possible price. Although this might seem to be the perfect house I am sure you will find something else, as much as it sucks having to let it go. You could put in the offer subject to sale and see what happens though. You never know - it might be the best offer they get and if they accept, if they don't well it wasn't meant to be?! oxox Good luck deciding.
To address if you are crazy - yes, and no.
We bought a new home before we sold our primary residence ... and found ourselves paying off 3 home loans (one house was an investment) for over 6 months. We thought our firstprimary residence would sell quickly, and it took over 6 months. We made ends meet ... just. It was a tough time, but we sure celebrated when we sold! So keep that in mind, unless you're almost guaranteed of selling at auction or before.
And then, no. If you find the perfect house that's within your overall budget, you'd be mad to let it go if you're sure you can sell your other home.
Good luck!
TBH I think buying before selling could be quite risky!!
I have a friend who just did that, bought a new house subject to the old one selling, moved into the new house and their house didn't sell so they had to give up the new house they were already living in, sold their old house at a loss and now have had to buy something different.
BUT if you think that another house won't come up and yours will def sell maybe see if you can buy on conditions that your house sells?
We bought our house with a conditional contract - well, technically, my mum bought it, as she was selling her house to move into a flat anyway. Fortunately she got an offer on her house straight away - it wasn't at auction - but it got a bit tricky when her buyer had to delay settlement which in turn delayed our settlement (and our seller's settlement too, and they had bridging finance). In the end it worked out though. From experience, prepare for the seller to not be as flexible with accepting lower offers if you want a conditional contract, and have bridging finance lined up because they do have an opt out - if they get a non-conditional offer they require settlement within (I think) forty-eight hours or they can opt out.
We tried and failed. But our circumstances are a bit different to normal. We run a business and it owed us a lot of money. Instead of drawing a salary we tool drawings which means on paper we had no earnings.
To top it off our broker applied for the wrong loan, where we had to show financials. We were borrowing less than 80% so we should have applied for a different loan.
My advice do your research, we could afford the loan but missed on the house because the banks didn't like to think outside the box and we just went with what the broker said without researching. (I was pregnant on bed rest and the business was busy but no excuse really.)
In the long run we got less for our house than planned so we we relieved. We also bought in the same area for $50k less only difference was no pool.
Normally I wouldn''t do it but seems to be a few people doing it at present. 2 different friends of mine have just bought before selling, in Melbourne, but both with settlements not until July so that they have time to sell. People who have not bought may be happy to have a long settlement so that they can find something to live in and therefore there may not be a need for you to get bridging finance.
Thanks for everyones advice. Have taken it all onboard, and after a chat with DH, we decided that we would put an offer in, only if we had the condition of us selling our house first. In the end I just couldnt risk it even though I am confident that our house will sell. But its just not a risk I'm willing to take. The vendor said he would speak to his wife and let us know if that is something they are willing to accept. So fingers crossed that it works out in our favour.
Thanks again, you all really helped me when my head and heart were in opposing corners :hug: