Most families who upgrade ask the same question before they ask anything else.
Do we buy first, or sell first?
There is no universal right answer. There is a right answer for your situation, and it depends on how much risk your finances can carry, how tight the market is in the suburb you want, and how much your family can handle a move in between.
Here is how we think it through with clients.
Buying first
Buying first means you secure the home you want before your current one is sold.
The upside is obvious. You are not rushed into a compromise because your own settlement date is bearing down, and you are negotiating as a buyer who can actually commit.
The risk is just as obvious. For a period you own two properties, and you need to sell the first one within a window you do not fully control. If the market softens while you are selling, you carry that pressure.
Lenders can help with bridging finance, which covers the gap while the first home sells. It is a useful tool, but it has limits on timeframe and it adds cost, so it needs to be set up with your broker before you start making offers, not after.
Buying first suits families with strong equity, a home that will sell well, and a target suburb where the right house does not come up often.
Selling first
Selling first means you know exactly what you have to spend.
That certainty is valuable. There is no guessing on price, no bridging loan and no chance of owning two homes at once.
The trade off is time. Once you have sold, the clock is running. If the right home does not appear before settlement, you may be renting, moving twice, and paying for storage along the way. With children and schools in the mix, that disruption is not a small thing.
Selling first suits families whose budget depends on the sale price, or who are moving into a suburb with plenty of suitable stock.
The middle ground most people miss
It does not have to be one or the other. A few tools narrow the gap.
A longer settlement on your sale gives you more time to find the next home without leaving your current one.
A rent back arrangement lets you stay in your sold home for an agreed period after settlement.
A longer settlement on your purchase gives you time to sell after you have secured the next home.
A contract subject to the sale of your current home is possible, but in a competitive situation it weakens your offer. Vendors will often choose a cleaner contract at a slightly lower price. It works best when a home has been on the market for a while and the vendor values a committed buyer.
Get the order of operations right
Before anything is listed or any offer is made, three things should be clear.
What your current home is realistically worth, based on recent comparable sales rather than the most optimistic appraisal.
What your lender will allow under each approach, confirmed in writing with your broker.
What your family can actually live with, if the timing does not line up.
With those answers in place, the decision usually makes itself.
What we work through here
- A realistic sale price for your current home, based on the evidence
- How often the right home comes up in your target suburb
- Finance options with your broker, before the search starts
- Settlement terms on both sides that give you breathing room
- Negotiation strategy that fits your position, so you are not showing your hand
Upgrading is where a lot of families feel the most pressure, because two big decisions have to line up at once. Getting the sequence right takes most of that pressure away.
If you are weighing up your next move, by all means get in touch and we can talk it through.
Written by Jack Freestone, Buyers Collective