Should you sell before you buy?

Resolving to move house is one of the biggest decisions you make.

So, it is crucial to decide whether to sell first, or to offer on an impulse for your dream home – and worry afterwards about how you will pay for it!

It can be tempting, when you have been looking for a new home for a while and have seen nothing that appeals (until now), to take the plunge and tell your solicitor to offer. However, at this early stage, your solicitor should be advising caution. The process of entering into a binding legal contract for the new house (what is called ‘concluding missives’) is usually not a long one. Typically, you will come under some pressure to commit yourself to the purchase within two to three weeks. Once you have done so, there is no turning back. You will incur penalties if you can’t pay on the agreed date of completion, and may even lose the house if you can’t complete within two weeks after the date of entry.

For the process of selling your home, the Home Report and floor plan needs to be prepared, photographs taken and sales brochures drafted. You should allow a minimum of seven days from the day you instruct your solicitor to sell your house to the day it goes “live” – in other words, the day when you arrive home to find the For Sale board in your garden, the advertisement on the ESPC website and (hopefully!) an orderly queue of people at your front door, waiting to view.

If you have a number of people wishing to offer for your home, your solicitor will advise you to set a closing date for all interested parties. It may be a week or two before you generate enough interest to make a closing date worthwhile. Once an offer is received, as with your purchase, it can take a couple of weeks for missives to be concluded. The date of entry will have to be set to coincide with the date for the house you are buying.

You may need a mortgage to buy the new house.

If so, the earlier you apply the better. However, you need to know how much you can borrow. That may not be possible until you have secured a sale of your existing house. You will also not want to stretch your budget for the new home too far, bearing in mind interest rates may rise and the payments on your new mortgage might become more expensive.

If all this sounds too stressful, it might be best to do things in a different order: speak to your solicitor first, to get sensible advice on a range of issues - the state of the property market, how “sellable” your house is; whether anything needs to be done to it before it goes on the market  - your solicitor or his property team can guide you on that; and how long your solicitor will need to get it “live”.

Once it’s begun to generate interest you can then actively look for a new home. Again, your solicitor will guide you on what to offer, bearing in mind the length of time it’s been on the market, the valuation, the condition of the property, the level of interest, what others have sold for in that area and, crucially, your budget. Armed with that knowledge you will stand a better chance of offering successfully, and know that your solicitor is making progress with your sale missives at the same time.

You will still find your dream home – it may just be a different dream home from the one you imagined.