You have found your perfect forever home and now you want to buy it before selling your house. In an ideal world, you would like to sell your current home before buying the next one.
It may be that your current house needs work, or you have realised that by the time you put your house on the market, your ideal home will be gone.
Often, a seller will put forward an offer on a property before selling their own home. Selling a home can be one of the most stressful experiences, and naturally, people prefer for a property to be chain-free because according to Rightmove, there are several reasons for a property chain to break.
In this article, we will cover:
- Should you buy first before selling your home
- Different options available to you when buying your new home before selling your current home;
- How to remove a property chain by selling to a cash house buyer;
- Bridging loans and their charges.
Table of Contents
Can I put an offer on a house before I sell mine?
Yes you can put an offer on a house before selling your own. Estate agents are obliged to pass on all offers to the seller however, a seller may not take you seriously if you still have a property to sell as your are considered not to be in a proceedable position.
Can you buy a house before you put yours up for sale?
Whether you can buy a house before selling yours depends on your financial circumstances. Is your current home mortgage-free?
Do you have a large deposit and a mortgage offer to buy your next home? Even if you do not, we can help.
Is it better to sell your house before buying another?
If you need to access equity tied up in your current home, selling first makes sense before buying your next house.
Once you have sold your property, you can move into rented accommodation while searching for your forever home.
Can I sell and buy a house at the same time?
Selling your current home and buying another at the same time can be incredibly stressful. This is because in a property chain, chances of a sale collapsing are higher. If you are stressed out, don’t worry we are here to help.
Can I buy a house before selling my own?
Absolutely, you can. If you have a deposit ready for your new purchase and a mortgage offer ready, you can go ahead. However, you may have to pay additional stamp duty, which can be refunded if you sell your own first house within a limited timeframe.
The reality is that most sellers must sell their own property before they can buy their next home. This means agreeing a sale of your property, aligning your purchase dates and hoping that everything runs smoothly through the conveyancing process.
There are pros and cons for selling before buying and likewise for buying a home before selling yours.
One option is to sell your own home with a cash buyer like Property Saviour. You will get a genuine cash offer with no deductions, and completion can take place at a timeframe that suits you. You will get a fair offer. We will also pay your legal fees.
Should I buy a home before selling?
You can only offer on another property if you are confident of selling your own home. Using a cash buyer could give you that advantage as we can demonstrate to your seller that we have proof of funds and will complete within an agreed timescale that works for all parties.
If you sell your property on the open market using an estate agent, the sellers will not wait for your property to sell. This uncertainty can lead to frustration, and the sellers may opt for another proceedable buyer.
Many estate agents are reluctant to remove properties for sale once solicitors have been instructed. This can lead to the risk of gazumping.
Buying a house before selling your current one tax implications
- As your new purchase will be classified as a second home, you must pay stamp duty tax. This is refundable within three years if you sell your primary residence.
- You will end up paying two lots of council tax bills with a real possibility that your recently vacated property will attract up to 200% rate of regular council tax.
- You may have to pay capital gains tax as your new home will now be your primary residence. Always check this position with your accountant.
Pros of selling to a cash house buyer
- A true cash house buyer can take out the stress of uncertainty and remove a property chain
- You are unlikely to get gazumped because of the reduced risk of your sale falling through
- You can take your time to find the perfect forever home for you and your loved ones.
Cons of selling to a cash home buyer
- You might not get as much as you would hope to get on the open market.
- You may still have to apply for a Stamp Duty refund if transactions take place simultaneously.
What are the alternative options?
You could rent out your current house and become a reluctant landlord. You will have to change your mortgage to a buy-to-let mortgage or obtain consent to lend from the lender.
Becoming a buy-to-let investor is not for everyone because of huge legislative and legal requirements, from checking the right to rent to electricity and gas safety compliance requirements. Landlord tax could also be a consideration, particularly if you are a high-rate taxpayer.
Landlords are taxed on their turnover rather than profit, and if you are a high rate tax-payer, you could end up paying as much as 40% of your rental income as tax.
If your current home has substantial equity, then you could consider taking out a bridging loan. A bridging loan is a short-term loan with interest rates starting at 1% per calendar month, a 2% arrangement fee, legal fees, and surveyor fees on top.
This is short-term borrowing until your main home is sold, which pays off the bridging loan. However, the longer your sale drags on, the more it will cost you in interest payments.
Should I wait to sell before buying?
You can sell your home and then consider renting until you find your ideal home. You will need to be ready to make compromises, particularly if you have a family with children or have mobility issues.
This is because of the lack of rental properties available on the open market.
What if you need to move now?
If you need certainty and speed of a quick sale, this is where Property Saviour can help. We can help you secure your next home even if you are stuck in a chain and potentially can offer a chain rescue service whereby, we will negotiate a small discount across the chain of 5% per property, allowing you to move on.
We will buy any home regardless of its condition or location. We will even buy a rural property, empty properties, run-down or dilapidated condition.
If you have found your dream home, don’t delay, as you might not get to buy it again.
Call Property Saviour to see how we can help or fill in the form below:
Sell with certainty & speed
Here's Why Sellers Love Us
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
