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Buying and selling... At the same time

08 Aug 2017

Young-couple-holding-key-600px.jpgIt’s a great time to upgrade in Perth, but with many sellers having to sell their existing home to obtain finance for their next purchase, a question hangs over their head…
 
When it comes to finding a new home, should you make a subject to sale offer or hang tight until your home has sold before looking for your new one?
 
Every situation is unique, but there are certainly some pros and cons to both scenarios. The most practical answer is to wait until your existing home has sold, after all, it’s no secret that it’s easier to shop when you have the finances.

Waiting will also ensure you are not disappointed if the sale of your home takes longer than expected (which very likely in this market), or worse, falls through after you’ve put the subject to sale offer on your dream home.

We always recommend you chat to your agent and finance broker to fully understand your situation and possibilities.

Here are some pros and cons of Subject to Sale’ offers…

Pros
  • Allows you to gauge the seller’s expectation regarding sale price.
  • Gives you first refusal and an opportunity to go unconditional should a 48-hour clause to be invoked.
 
Cons
  • Timing is not always perfect: you may have to pay an extra cost of bridging finance to if you’re stuck with two mortgages at the same time.
  • Subject to Sale offers can potentially turn off sellers and make them less likely to negotiate on their price.
  • You may need to make a higher offer to convince an owner to hold the property while you sell your home.
  • After your offer is accepted, the seller can still invoke the 48-hour clause - which means they have the right to continue advertising their property and to negotiate with a potential second buyer.
  • When you make an offer Subject to Sale it is impossible to know exactly how much money you have to spend as your current home hasn’t sold yet. Will your selling price cover your finance for the next?
  • Selling your current home before placing an offer on the next puts you in the best possible position - but things are not always that simple. If the home of your dreams comes along before you sell your property, a Subject to Sale offer allows you to be in the game, and make your serious interest in the property known. 
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