26 May 2017
So which came first: the chicken or the egg? It’s the kind of mind-boggling question that will keep you awake long into the night as you consider the philosophy of life.
But it doesn’t have a patch on a more baffling question. Which do you do first? Sell your home and then buy? Buy and then sell? Stare balefully at your other half and hope they have an answer?
It’s a tough one, and the truth is you can do it whatever way you like. Selling your house is a process with a couple of variables but hopefully with the same end result: you sell your home and use the money to buy a new one.
Buy or sell – which comes first?
Most people put their house on the market the same time as they go looking for a new one. It’s a logical procession. But something has to happen first. Either your house will sell or you’ll fall head over heels for a property and you’ll snap it up before your other humble abode has been sold.
It depends on the scenario – and no two scenarios are the same. Maybe two young buyers want to upsize because they’re having a baby. In this scenario, they will likely want to sell first as the burden of owning two houses (even for a short while) is just not a goer for them.
Logically, selling first and buying second makes sense as you’ll have the money to splurge on your new abode now the house has sold. Otherwise, you may be in a pickle if you think your house will sell for more than it actually does, and you’ll be left carrying debt with you.
Risk vs. reward
In the grand scheme of risk versus reward, selling first is also the least risky option. You’ll know your budget so you’ll be less likely to get caught up by over-spending or buying a new property that’s a little outside of your means.
On the flip-side though, if you sell first there might be a wait until you buy your new house and move in.
Selling first: pros and cons
Anyone who has bought before will agree that it can be a lengthy experience (to say the least).
What we’re saying is that there could be a gap between selling and buying, or selling and buying and moving in, so you may be faced with having to rent, move home with the aforementioned mammy (back to the single bed you’ll go!), or couch surf with friends until you’re all moved in.
Renting could get particularly expensive, as you’ll be paying rent, a possible mortgage, bills, upkeep, and for two whole moves. So keep this in mind!
Buying first: Pros and cons
However, if you’re in a situation where you are doing well financially and you can afford a possible wait, buying first comes with pluses. For one, you won’t have to rent in the meantime. And you also won’t have to compromise.
With buying first, you can buy the house of your dreams. If you’re waiting until you sell first, then that house may well be snapped up by another home buyer. Imagine the pure frustration of seeing another couple living their lives in the house that was supposed to be yours.
Arggh! Quick count to ten, folks. It’ll all work out!
There are negatives here too though, as buying first might mean having to pay for two properties.
Ouch. You might find yourself under pressure to settle for a lower bid than anticipated if you need to quickly sell your house, which isn’t ideal – especially if you’re in a slow market.
Whether your catch-22 is more concerned with chickens or eggs or buying or selling, it’s all dependent on your point of view. When it comes to buying or selling, there is no outright right answer. It really does depend on your financial stability, the market, and whether or not your dream home will be snapped up if you hang around waiting for your gaff to sell first.
Are you ready to buy your next home?
Whether you’re planning on buying or selling your house first, why not book a mortgage meeting to suit you with one of our mortgage experts? Go on, check out our Next Time Buyer guide in the meantime.
EBS d.a.c. is regulated by the Central Bank of Ireland.
The content of this blog is expressed in broad terms and is limited to general information purposes only. Readers should always seek professional advice to address issues arising in specific contexts and not seek to rely on the information in this blog which does not constitute any form of advice or recommendation by EBS d.a.c.
EBS d.a.c. neither accepts nor assumes any responsibility in
relation to the contents of this blog and excludes all warranties,
undertakings and representations (either expressed or implied) to
the fullest extent permitted under applicable law.