You have options for when to buy your next home when selling a house or flat
Typically when you’re selling your house or flat you’ll be planning to use the proceeds in full or part to help buy a new home. But there’s no rule that says you have to already buy a house, or start the buying process, before the sale of your existing property is complete. And even if you have tenants at your house or flat, you’re still able to start the selling process.
Benefits of not buying a new house before you sell your existing home
If you decide to sell your existing house or flat before attempting to buy your next home, you could be several benefits that might help your timeline, budget, or both.
You won’t be rushed into selling your home at a low price – Because you are selling your property and not already in negotiations for a new home, you have complete control over your sale. This means you don’t have to rush to accept a low purchase offer quickly because you need to cover the cost of buying your next home. This means you have total financial flexibility by waiting to buy.
The proceeds from your sale will inform your purchasing budget – If you wait to buy your home until after the sale of your existing place is complete, you’ll know exactly how much cash you have in the bank as a result of selling. This should help you to more accurately budget and plan for what is an acceptable and affordable price for the next house that you buy.
You might have a stronger hand in talks for buying your next home – Because you will already have the cash from selling your current home in the bank, you might be able to improve your standing in negotiations with the owner of the next house or flat that you want to buy. That’s because they’d rather sell quickly to someone ready to proceed with the purchase, rather than someone who has to wait until their existing home has sold.
Houses prices may drop before the time you start looking to buy – Waiting until the sale of your existing property is complete can also be beneficial if overall home values go down during that period. Depending on how the property market’s doing, you might get lucky and the price for your next dream home might be much lower than it was when you started the work of selling your current place. You can always get an idea of prices in your area through property websites like Zoopla, but only use these as a general guide and not for an exact valuation.
You’re more likely to avoid being gazumped when buying your next property – Gazumping is what happens when you’ve started the process of buying a property but another buyer makes an offer and the owner switches to selling to them. If you wait to buy a home until after selling your existing house or flat, gazumping is less likely because the owner knows you are ready to buy without having to wait for a sale.
Drawbacks of selling your house before you buy the next
While there are many perks to selling your home ahead of buying your next one, there are a couple of potential drawback that it’s also important to consider.
You run the risk of having to rent for a while – Should your house sell before you have a new home lined up, you might be forced to rent a place until you can buy your next property – and depending on how long your search takes for a new home, this could take a while. Having to look for a new home while also browsing and viewing places to rent can be stressful and time-consuming. And rent money is cash that could instead be going toward your mortgage on your next home, so it might not be an ideal situation for your finances either.
Home prices could jump before you’re ready to buy – Another risk of waiting until you’ve sold your home before buying a new one is that the price of properties could jump in the meantime. We all know that the housing market can be unpredictable, and your dream home might suddenly be much more expensive at the end of the sale of your existing property compared to at the start of that process. If you’re working to a strict budget this can be a major problem.
Deciding which option to use when you’re ready to sell your home
Once you have settled on the important issue of whether to pursue the sale of your home before buying your next dream property, you’ll then have to answer the question of which method you would like to find a buyer for your current house or flat. The choices are usually selling to a quick buyer, selling with an estate agent, selling at an auction or selling without any help.
Keep reading to learn about the pros and cons that you will find with each of these methods, including whether or not they charge fees, how long they might take, and more. For example, it can take more than a year to sell a home when you do so on your own or via an estate agent, whereas it should only take a few weeks if you sell to a quick buyer like LDN Properties.
A helpful tip can be to write down your main aims with the sale of your property, including how fast you want to find a buyer, whether or not you are willing to pay commission on the sale, and your ideal property sale price. Compare all of these and other factors against the specific details of all four selling methods below and you should find which one best suits your scenario.
Selling to a quick home buyer
Quick home buyers are companies such as LDN Properties that have the financial resources in place to immediately buy many types of leasehold or freehold home. They don’t have to wait weeks or even months to first get approval for a mortgage to pay for the purchase, so this reduces the typical selling timeline to just a few short weeks – and that includes the final exchange of contracts.
In addition to being often the fastest way to sell a property, a legitimate quick buyer will never make an owner pay any commission for the sale of their flat or house. This ensures that you will receive the full sale proceeds, which is good for those people trying to save costs when selling. It compares favourably to selling through either an auctioneer or an estate agent because those two methods charge fees that will add to your costs as they’re taken out of the final proceeds.
Selling to a quick buyer can also be a wise move if you have a home that is considered a "problem" property for any negative reason, whether that is because of a physical problem like damp or dry rot, a legal dispute like a fight over access rights and other issues, or more. These companies are known to make fair and fast offers for homes regardless of such elements
If you accept the initial offer, the quick buyer will then send a representative to your home in order to inspect the interior and exterior before the company makes a final offer. This is the only viewing that you will need to agree to, compared to potentially dozens of viewings or more if you decide to sell through other options, for example using the services of an estate agent.
And if you then accept the final offer from the quick buyer, they will work swiftly with your solicitor or other legal representative to complete all of the paperwork required to finalise the sale. The entire timeline should only be a handful of weeks from beginning to end, so you may want to consider this strategy if one of your top aims is to find a buyer as fast as feasible.
For your extra assurance, you can ask quick buyers to prove if they are members of an independent entity known as The Property Ombudsman (TPO). This organisation issues rules to protect owners against scams in the quick buying industry, and all true TPO members like LDN Properties must agree to following these policies. You should never sell your home to a company that can’t prove it belongs to TPO, as it might be a fraudulent business.
Selling with an estate agent
If your top priority with selling your house or flat is not having to put in much work, enlisting the help of an estate agent could be a decent choice. That’s because an estate agent will handle almost all of the tasks involved in finding a buyer for your property, and these steps are numerous and range in effort required, as the website Reed Courses notes.
Typically, an estate agent starts by producing a listing for your home – this describes the property’s main features and includes photographs of the interior and exterior. They will advertise this listing in their office, in local newspapers and online to get people interested in the home, and then organise viewings to give potential buyers the chance to tour the property. Finally, they’ll hear offers and attempt to get one through to the exchange of contracts.
If you want to reduce you costs when selling then you might want to consider another option, as an estate agent will charge you commission if they manage to sell your home. This is usually charged within a range of 1.15 percent to 1.40 percent of a property’s sale price and is deducted immediately from the final proceeds, although the exact rate may be higher or lower than this.
Selling through an estate agent is also not necessarily the best selection for those owners who want to secure a buyer as fast as they can. It can take many months or even more than a full year to sell this way, so if you would like to sell fast then you should review some of your other options. For example, selling to a quick buyer will only take a few weeks from start to finish.
Note also that if you receive an offer when selling this way that the buyer could change their mind and cancel it, causing the sale to fall apart. And you can’t get any penalties from the person for doing this unless you have already exchanged contracts. You would then have to start over with trying to find another buyer, extending your total selling timeline much further.
Selling at an auction
Another strategy for selling a house or flat is through an auction, and this can be another viable option for those owners who don’t want to put much effort into finding a buyer. The auctioneer will take on responsibility for creating a listing and advertising it to get people interested in your home, followed by hosting the auction and overseeing completion of a successful sale.
For doing this work, you can expect an auctioneer to charge you commission – this will add to your expenses as it will be deducted right away from the final auction proceeds. Typically this is charged at about 2.5 percent of a property’s sale price but the exact rate may be lower or higher, so you should always check with individual auctioneers about what they will charge.
There are some auctioneers that could be open to either reducing the rate of commission that they charge you, or having the buyer pay a share of the fees that you owe. Both of these are steps that can help with lowering your costs, so it is worth asking if either might be possible.
One key step involved with auctioning your home is choosing the reserve price, which is the lowest price at which you agree the property can sell. It’s vital that you take time to devise a reserve price that should produce some profit from the sale even after you have subtracted the auctioneer’s fees. Failing to do so can run the risk of breaking even, meaning you sell the house or flat at a price close to what you originally paid for it, or even selling at a loss.
If you get a single bid at the reserve price then this is deemed a legally binding agreement that you will sell your home, and the buyer can sue you to enforce the sale if you try to walk away from it. And if you get no bids on the property then it does not sell and you will need to begin again with attempting to find a buyer, which will add more time to your selling schedule.
Generally, this is not a fast way to sell any type of home because there is plenty of waiting involved, including several weeks or even months from the day that you opt for selling this way through to the day that the auction takes place. Even if you do manage to sell the property at the auction, the buyer then has about a month on average to sign all of the required paperwork and complete the other tasks necessary in order to finalise the purchase of your home.
To speed up the auction process, you could ask individual auctioneers if they would be open to setting a shorter deadline than a month for the buyer to finish these tasks. Just note that some auctioneers might give buyers even more time, which would mean an even slower sale.
Selling without any help
Perhaps the most stressful way to sell a property is on your own, because the onus is on you to handle all of the steps needed to find a buyer. You will need to put together a listing, advertise it, schedule viewings, hear offers and aim to get one through to exchanging contracts.
This is a significant amount of work and it will require a lot of your effort and time, and it might take many months or even more than a full year before you manage to sell the property. That’s why you should only consider pursuing this approach if you have previously sold a home or if you have a suitably skilled friend or family member that can help with the sale at no charge.
Remember also that someone can make an offer but then rescind it, which will cause the entire sale to collapse. You would then have to start over with attempting to find another buyer, delaying a sale much further. And unless you have already exchanged contracts, there is nothing that you can do to get any penalties from the person that withdrew the offer.
One of the biggest advantages of selling without an auctioneer or an estate agent is that you will not have to pay either of these third parties commission on the sale, as MoneySuperMarket says. That might seem appealing to those owners who are trying to reduce their overall selling expenses.
But you may find that any saving you make through avoiding commission is cancelled out by the funds that you will need to spend on advertising you listing and other tasks. For that reason, you may want to think about selling your flat or house to a no-fee quick buyer like LDN Properties. This would give you the same benefit of not having to pay any commission but with the additional perk of being able to complete the sale within just a few short weeks.
Popular questions we receive about selling a home before buying a new one
In conversations with homeowners, sometimes we’re asked various questions and for advice about selling properties before buying new ones, and these are the ones that recur often:
No. There’s no mandate that you need to have started the purchase process on a new home before you can sell your existing place. As described above, there are in fact several pros from waiting until you’ve sold before searching for a new house or flat.
The answer is going to depend on a host of factors that are unique to you, including whether there’s a particular home you’re interested in – if you wait until after selling, you might be able to get that same house for a lower price if property values drop.
Again, this will be an answer that depends on your individual circumstances including your financial needs. But generally speaking, the pros of selling your home before buying a new one can outweigh the negatives.
You can typically choose from selling to a quick home buyer such as LDN Properties, selling with an estate agent, trying your luck with a property auction, or selling without any assistance. There are clear pros and cons associated with all four methods that you should learn about before making a decision, including how long they might take and whether they charge fees.
Many homeowners find that the speediest way to sell a property is to get in touch with a quick buyer like LDN Properties because the entire timeline should only be a few short weeks, and that includes the time taken to exchange contracts and receive the full sale proceeds. Selling on your own, at an auction or with an estate agent might all take at least several months.
You will have to pay commission if you choose to sell using the services of either an auctioneer or an estate agent and they succeed in finding a buyer for your property. This fee will increaser your costs because it will be taken out of the final sale proceeds. If you instead decide to sell without any help or to a no-fee quick buyer then you can prevent having to pay commission.
One helpful step can be to ask an individual quick buyer if they can prove they are registered with The Property Ombudsman (TPO) – this is an independent entity that writes rules to protect homeowners from fraud in the quick buying industry, and all TPO members like LDN Properties must adhere to these rules, which should give you peace of mind when selling to them.
