Sell First or Buy First
Most people assume that there are only two choices. Yet both choices have their risk. If you sell first you may worry “What if I can’t find another property, I’ll be homeless”. What about buying first? You might get an agent’s opinion on sale price, talk to the bank about financing your purchase using the equity in your current property, find your next home then put yours up for sale. Be very careful, whilst encouraged by most agents this approach carries the highest risk for you.
Why would an agent lead you down a risky path? Because, looking down the barrel of some very scary finance, you become putty in their hands. The agent gets a quick and easy sale while you can end up with a financial disaster. Have you seen the ads? “Our seller has two houses and can only afford one”, “The bank’s not worried yet . . .” “Must be sold . . . all offers considered”
Don’t be tricked into believing that an auction will save you. That just puts you under more pressure, more cost and still no certainty of a sale.
There is an alternative, which guarantees your safety.
The Safe Way
Consider your move as four steps. To stay safe you must complete all four steps before you commit to selling or buying.
Step 1: Find a buyer. Your property goes onto the market without any pressure to sell. You are looking for the highest price possible. Once a buyer is found, the sale process starts but you don’t exchange contracts until you find your next home. You know you have a buyer and you know exactly how much you have to spend. No guessing.
Step 2: Find your next home. This is much easier and far quicker now that we have the internet. If the right home is there for you, it will normally be found within a few weeks.
Step 3: Check the finances and make sure you’re happy with your decision.
Step 4: Sell and buy. You solicitor will conduct a simultaneous exchange of both contracts, sale and purchase.
Does it really work? We have helped hundreds of families move using this simple approach. For the vast majority, the right home just seems to be there when they’re ready. But for the very few who can’t find the right home to move to:
Remember, until you reach Step 4, you have not made any commitment to sell or buy. So if you can’t find the right house at the right price you simply stay put. Disappointed, may be, but your finances are still in tact and there will be no fees payable to The Real Estate Shop. We take the risk not you.
No expensive bridging finance
No risk of ending up with two houses
No risk of ending up homeless
The agent takes the risk
Most real estate agency agreements have a clause, which forces you to proceed with a sale or pay the agent a full fee. Only The Real Estate Shop recommends safer selling.
If like most buyers you compromised on your last home you may be planning to get everything this time. Unfortunately, this rarely happens. As long as the essentials are there you will make it your home after you move in. The most important criteria is that the home you buy feels right.
Two words of advice . . . “Stay clear”. Buying a first home is nerve racking enough without having to buy from someone shouting at you with a hammer in their hand! Auctions are a horrible way to buy. First there’s no disclosed price. Second, if you are given a probable price it’s probably an underestimate. A low price might persuade you to attend the auction and the agent needs a crowd. So there you are with your hopes high only to be shattered in the first few bids. Auctions are often a masquerade of deceit with mountains of stress and pressure designed to make people jump to decisions they would never make if they had time to think.
If you are negotiating on a property and miss out to someone else, that’s negotiation. However, if you have been told by the seller or the agent that your offer is accepted and then the property is sold to someone else for a higher price, you have been gazumped.
Most decent people see this an unethical practice but several agents encourage it. Be warned.
Buyer Price Declaration
Most buyers and sellers tell us that they dislike the games and deception that typically make up a real estate negotiation. So, The Real Estate Shop has adopted a negotiation principal developed by the late William Vickery who was awarded the Nobel Prize for Economics. It is considered the most ethical way to negotiate a selling price.
Firstly, we have an asking price. This is a price we consider achievable and fair. You are then invited to complete a Buyers Price Declaration that states the highest price you are prepared to pay. Your highest price may be the asking price. If there is other interest you may be prepared to pay above the asking price or you may decide that your maximum is below the asking price. Your offer is confidential and will not be disclosed to other buyers.