With how the housing market moves today, it has been observed that most property people look to sell their currently owned properties before buying a new one, forming a chain of transactions. While it poses some risks, one may also be able to benefit from it.

As a property investor yourself, you might want to check out the pros and cons of selling your own home before buying a new one and get some pointers on how you can effectively do it.

Here are a few advantages of selling your current property before buying a new one that you want:

  • It gives you a better leverage – putting the new property’s seller under the impression that you are serious about buying. Sellers are often cautious of transaction chains where their sale depends on the buyer’s probability of finding someone to purchase their current property.

  • If you sell your current property for a reasonable offer, your buyer is less likely to look for another. This shows a higher probability for you to push your own purchase of a new property.

  • You are in total control of how much you’re selling the current property for. You don’t have to agree to a much lower offer just because you need to funds right away.

  • You’re likely to get an ideal price agreement if your buyer’s keen on completing the purchase and move in ASAP.

  • If you sold your property before even finding a new one to buy, there’s a chance of the prices to fall at a given time – hence, giving you a leverage to get more affordable properties.

And what are the drawbacks of selling your property first before buying a new one?

  • You’re at risk of having to rent temporarily while looking for a new property to buy as soon as your home gets sold.

  • The chance of a lower selling price of the new property you want to buy is 50/50 – and even slimmer if the housing market trend is going up. You’ll be lucky to have your parents or friends let you stay with them temporarily to save the rent money and afford that new home for yourself.

  • Renting can be stressful, including and especially the moving and landlord arrangements.

To make things more efficient if you’re looking to sell first before buying a new one, here are a few pointers for you:

  • Get organised. If your sale proceeds will not be enough to cover the selling price of that new property, arrange a mortgage as soon as possible.

  • Research is always important. Find an area and choose the kind of property you think is ideal for what you need within the location – and based on how much you can afford.

  • Get yourself updated with how the housing market goes. Learn the difference and movement in prices so you’ll know if your sale proceeds can afford the new property you want to buy.

  • Show your agent you trust them and always be polite and friendly. It puts your property-for-sale at an advantage of being on top of their list.

  • If your sale proceeds are not enough, have a pre-approved mortgage so your seller can believe you’re serious and ready.

  • You can reasonably prolong your sale so you can have time to search for a new property to buy. Arrange a reasonable timeline with your buyer.

As you see, organising everything and allowing leverage will prove that selling your existing property first before buying a new one may just work to your advantage. Just do not forget to do your research to ensure everything is in order.