Should You Buy Before You Sell or Sell Before You Buy? Exploring Your Options on the Gold Coast

• 05 November, 2024
• Posted By: Edward Smyth

The Gold Coast is a dynamic real estate market, known for its appealing lifestyle, vibrant economy, and high demand for property. If you're considering moving to a new home or upgrading your investment portfolio, you may face the decision: should you buy a new property before selling your current one, or sell first and buy later? Each approach has its advantages and risks, and there are options to help manage them, especially within the context of the Gold Coast market.

Buying Before Selling: Pros and Cons

Pros

1. Freedom to Search – Buying first can give you the flexibility to wait for the perfect property without the pressure of an impending sale deadline.
2. Reduced Moving Stress – You’ll have the chance to move directly into your new property without interim accommodation, saving you on storage and rental costs.
3. Locking in a Home in a Hot Market – With demand often high on the Gold Coast, buying first means you can secure a property before prices rise further, which is particularly advantageous in a competitive market.

Cons

1. Financing Challenges – Buying first often means you'll need a larger deposit, bridging finance, or other arrangements. If your current property takes longer than expected to sell, this could put you under financial pressure.
2. Risk of Overcommitting – If the market shifts or your property sells for less than expected, you may find yourself short on funds. This can be a risk if you’re relying on the sale to cover part of your new purchase.

Financing Options for Buying Before Selling

On the Gold Coast, several financial products can assist buyers in this scenario:

• Bridging Loans: This short-term loan allows you to buy your new property while you wait to sell your existing one. Be mindful, though, as these loans come with higher interest rates and may require stringent qualifying criteria.
• Equity Release: If you've built substantial equity in your existing property, some lenders may allow you to use it towards a new purchase. Keep in mind this approach requires strong financial standing.
• Guarantor Loans: Some buyers can leverage a guarantor, often a family member, to secure a loan without selling first. This option can be beneficial for high-demand areas like the Gold Coast.

Selling Before Buying: Pros and Cons

Pros

1. Better Financial Position – Selling first provides you with a clear budget, allowing you to make a purchase with greater financial confidence. It removes the guesswork and pressure that comes with juggling two properties.
2. Avoiding Bridging Finance – Without the need for a bridging loan, you can save on potential high-interest costs and fees, which can be significant.
3. Market Adaptability – Selling first means you’re less exposed to changes in market conditions. Once you have funds from your sale, you can wait for an ideal buying opportunity without financial strain.

Cons

1. Potential for Temporary Accommodation – If you don’t find a suitable new property quickly, you may need interim housing, which could mean rental and storage costs.
2. Rushed Decisions – Selling first can sometimes pressure buyers into making hasty decisions. If the Gold Coast market moves quickly, you might feel rushed into purchasing a less-than-perfect property.

Options to Consider When Selling First

• Extended Settlement Period: When selling, you might negotiate a longer settlement period, giving yourself more time to find a new home before needing to vacate.
• Leaseback Arrangement: In some cases, buyers may agree to rent the property back to you after the sale, allowing you more time to search without needing to relocate.
• Renting: While this isn’t always ideal, renting a property after you sell can provide temporary flexibility. This allows you to buy with the freedom of knowing your exact financial position.

Factors to Consider When Deciding

1. Market Conditions on the Gold Coast

In a fast-paced market, like much of the Gold Coast, buying first could be advantageous to lock in a property before prices shift. However, if the market is slower, selling first might be a safer option as it reduces your financial risk.

2. Financial Flexibility

Evaluate your financial position and borrowing capacity. If you have the financial capacity to manage two properties temporarily, buying first could give you an edge. Otherwise, selling first might allow you to keep finances stable without bridging loans or extra interest.

3. Your Timeline and Life Circumstances

Consider your lifestyle, job situation, family, and other personal factors. Families often prefer to avoid renting and moving twice, which may make buying first more appealing.

4. Professional Support

Working with a local real estate agent and mortgage broker who understands the Gold Coast market can make a significant difference. They can advise on current trends, negotiate sale terms that suit your timeline, and provide realistic property valuations to help you make informed decisions.

Conclusion

The decision to buy before selling or sell before buying ultimately comes down to personal circumstances, financial readiness, and the Gold Coast's market conditions. Each option has benefits and risks, but with the right planning and professional support, you can navigate the process smoothly. Be sure to explore all financing and timing options available, and reach out to a trusted real estate professional to guide you through every step of your journey.

In a competitive market like the Gold Coast, having clarity and a strategic plan will put you in the best position to achieve your property goals, whether you choose to buy first, sell first, or explore creative solutions in between.