Considerations Buying Selling Property Risk

Considerations Buying Selling Property Risk


Considerations Buying Selling Property RiskConsiderations Buying Selling Property Risk.  Whats the right way to do it? Buy a new home and then sell the one you are in? Or sell first and then go looking?  “The answer to these questions depend on your current circumstance and your unique situation.”  There are a few elements that will weigh in on the decision.  Such as the financial options available, the local market environment.  Your feeling about moving more than once. You need temporary accommodation while searching for a home.  Here are ‘three considerations’  before making your decision…

Considerations Buying Selling Property Risk

Finance

Few people have the financial capacity to buy a home for cash. Which means that they will need to take a loan from the bank. What this means is that most buyers will need the equity they have built up in their current property. This will help them buy another home. This scenario leaves buyers with little choice but to sell first and then buy. There is the option of selling the property. Then negotiating with the new owners to rent the property back until you find a new place. The success of this option, will depend on how eager the new owner is to move into their new home. A reminder, you will have to pay occupational rent.

Not ideal, but another option is to move into temporary accommodation with family members. Or friends or a short term rental. In this instance, storage facilities may also become a necessity. While having the equity available is an advantage. Temporary living arrangement could push you into making a faster decision than you should. Purchasing a property should never be a rushed decision. It should give the time and deliberation it deserves. If you would like an advance on your home equity. There is the option of having the money bridged. Before the sales transaction takes place.

Bridging finance amount. This amount is calculated on the equity available on the property. Your credit record, and the expected cash inflow. “Perhaps the best decision would be. To stay in your current home while looking for another property. You can make an offer to buy your next home, subject to the sale of your current home. It will give you time to do your research and find the perfect home that fits all your criteria before making a move. If you are in the rare position of not needing the equity from your current home. You still run the risk being stuck with two properties. While this could be fine as a short term solution, it may not work on a long term base. In this instance, you will need to have a contingency plan in place.

The local market

Although there are general overarching factors that will impact the property as a whole. Most micro markets are in unique circumstances that only pertain to that area. Aspects such as the type of home, price range, and availability of other similar homes in the area. Will have an impact on the sale of the property. Real estate professionals will be a valuable source of information. They researching the specific factors that influence the property market in a particular area. The agent will be able to provide you with insight into how long homes take to sell on average. “On the other side of the scale, from a perspective research. What properties are available in the areas you may want to buy into. You should be looking at all aspects and elements that may influence your decision.”

Risk and Emotion

Whether you sell or buy first, each option has an element of risk involved. So ask yourself, is it better to sell first and not have accommodation to go to. Or buy first and have two bonds to pay until at least one home becomes sold. “There will be emotional aspects that will pull you in both directions.” “The ultimate answer! Based on the financial options available to you and the local market conditions. Regardless of the your decision. You will need to become vigilant and have a plan in place to deal with the consequences of each scenario.

Courtesy: RE/MAX of Southern Africa

Considerations Buying Selling Property Risk

Marloth Kruger