Upgrading homes.. what order do I buy/sell?

So we need a bigger home in a neighbouring school zone so we’re preparing our house for sale for this year..

I have found a house for sale we really like.. we don’t have finance, deposit or anything..

We do have a home with plenty of equity with a manageable mortgage but happy to add a small amount to it to upgrade to new home...

What order do we do this? Our place isn’t ready yet and husband wants to buy first so we’re not left without a home. There are a few things we wanted to do to our place first like paint inside and do garden first so it wouldn’t be ready for a few months yet....

Can anyone please tell me what they did? Bridging loan? Bought and rented out? Speak to bank first maybe?

be prepared to not get the house that you mentioned. if you don't have any finances or loan paperwork ready to go the process could take months.

It took me a few weeks not months to get bridging finance approval when I was looking to buy and didn’t want to sell first. I used a broker. I’d find a good broker and let them know you have a house you like so would like to sort it all ASAP.

In the end we couldn’t find anything we liked and we’re building so I sold up and am in a rental in the interim.

Find out what the rental market is like first. Here there is next to no chance of getting a rental. Demand is strong supply is next to non existent. However houses are also selling after being on the market for days not weeks.

If you can’t get a rental then practically you probably need a bridging loan.

Speak to your bank or a broker. Gather the things they typically request - payslips, last years tax returns, summary of assets and liabilities, credit card statements etc.

We purchased then sold. We were in a good position though as we were able to get finance to purchase without selling our existing house but then were lucky enough to sell quickly and both properties settled within a couple of days of each other. I’d suggest speaking to your mortgage broker and bank to see what your options are.

We probably wouldn’t have done it this way unless we were very confident that our house would sell.

In my experience, go to a mortgage broker rather than approaching your bank directly.

Mortgage broker is so much faster and more motivated. The bank can be really slow.

Thank you, I will start with our bank as our loan is part fixed so I need to break it... it only has a few months left so now going to be too much..

I’m sure our house will sell, we’re near two primary schools and in a nice young family area and houses sell quickly. We’ve also done lots of work to the exterior of our home to improve street appeal and I have an agent coming this week to give us an idea of what we would get and what we should do to make more appealing..

I don’t have a broker but happy to find one that can help..

I really like the new home as it ticks all the boxes...

Thank you, I will start with our bank as our loan is part fixed so I need to break it... it only has a few months left so now going to be too much..

I’m sure our house will sell, we’re near two primary schools and in a nice young family area and houses sell quickly. We’ve also done lots of work to the exterior of our home to improve street appeal and I have an agent coming this week to give us an idea of what we would get and what we should do to make more appealing..

I don’t have a broker but happy to find one that can help..

I really like the new home as it ticks all the boxes...

you might not need to break.

Some banks let you transfer the asset.

Speak with a broker. Of course the Bank will tell you it needs to charge you break fees!

I could always use equity to increase variable portion and use that at deposit... A few variables I guess...

I could always use equity to increase variable portion and use that at deposit... A few variables I guess...

yep - thats why a discussion with a broker is a good idea. even if you don't use them in the end.

I could always use equity to increase variable portion and use that at deposit... A few variables I guess...

 

yep - thats why a discussion with a broker is a good idea. even if you don't use them in the end.

Thanks for your help

no probs!

Also think about how quickly you could get your house ready to sell. How big a difference will it make if you do the painting etc that you planned to do? If it’s only likely to add a few thousand to your selling price, is that worth missing out on the house you really want? A lot of people are happy to get painting done themselves prior to moving in, if you sold as is.

There are state to state differences in how properties are sold too. Where I am, you could put in an offer subject to the sale of your house. The vendor could accept that, and then if they received another offer (eg cash offer), you could choose to not match the offer and not get the house, or get bridging finance to make your offer a cash one too. Not sure if that’s an option where you are.

Agree with PPs that a mortgage/finance broker is the way to go. Gather your payslips, info re your debt (credit cards, loans etc), budget or other info re regular expenses before your appointment. Ask for recommendations re a broker in your area.

You could also make an offer subject to the sale of your house.

Usually you’d have to offer a better price to make it worth their while to wait.

We recently bought first then sold. We had already been preparing our house for sale - serious decluttering (and yet still so much junk when we moved), fixing those little things, patching up paintwork rather than repainting. Despite houses around us selling fast ours didn’t (still can’t figure out why), but we had a bridging loan at a very reasonable rate and could afford to wait (home opens every weekend were the killer). We didn’t go through a broker, but DH gets what he wants from the bank (one of the benefits of a high income seemingly).

But we were only moving for the right house, which don’t come up all the time.

Depending on the market and how long it might take you to find another house if you missed out on this one, I'd look to buy first and then sell mine, especially if houses in your current neighbourhood sell quickly.

I agree with [mention]BusbyWilkes[/mention], and check with your agent, but the return on your investment (time, money, and disruption) might not be worth the effort to paint and garden (a tidy is a good idea, an overhaul may not be necessary).

It depends on the market in your area, and what you’re prepared to accept.

We did the risky buy before sell. We had to request a long settlement on the place we bought (not all sellers can do that, we paid a premium so they would accept it) and we had to sell with a short settlement (not all Byers can do that) and we did sell quickly because houses in our estate always sold immediately, we had three good offers after the first open house. So we were fine in the end (although settlement/move in day was crazy stressful, three properties had to settle on the same day in a chain of exchanges)

If properties in your area sell quickly, you could do the same as us, but it’s very very risky. You could end up being forced to sell at a low price, or you don’t sell then you end up with two mortgages to support or the bank just says no and you default on the purchase contact.

I think selling first and renting for a while is safest, and gives you time to find the perfect property.

Edit: we wouldn’t have been able to get a bridging load at the time, so we had to sell fast

My first step was to speak to our bank and to look at our options. I wanted to sell after we'd built and moved, and was looking into a bridging loan. We were presented with a few options. I did a budget to see how much financial pain we'd be in with each option. In the end, we had enough equity and earnt enough to service a second mortgage without requiring a bridging loan (which are expensive!) - so we didn't have the pressure to sell under a certain time frame.

Our neighbours bought first and when they tried to sell, the market was flat and their house was on the market for some time. They had to drop their asking price because the bridging loan was killing them. If they'd had a crystal ball and waited a couple of years, they could have sold for $300K more.

We spoke to a broker first, then purchased our house with a long settlement (we asked for the longest they would consider and they offered 4 months- we were thinking 3 so were pretty happy!!). We did have a deposit and were very comfortable with the numbers used- underestimated what we would sell the house for and overestimated how much we would need to borrow- so knew it was all ok.

We had started getting our house ready but it still took about a month to get it on the market, because of the paperwork and the things I would never have thought of (REA sent a stylist over, then gave us a week to do/ not do stuff, then photographer).

We only just sold in time, so had started organising paperwork for bridging finance (we had purchasers but they were struggling to secure their own finance).