Suppose there's a house that I'd like to buy.
Suppose I have the cash for a deposit and I can presumably get a loan.
I'm living in my house, but I need to sell it and buy this house at the same time without having to rent and put stuff in storage.
How would I go about doing that?
Thanks, fellow giraffe. Our broker was quite alright. And he did say that our monthly spending was quite alright. But that was 10 years ago. Hah!
You can also try for a bridging loan. Speak to your lender / broker
Consider also a few months of interest on a second mortgage isn't much in the scheme of things with house prices these days, think of it as the fee you pay to be sure of getting the house you want.
It is stressful though.
Trying not to be too emotional about it. I'm looking at getting another place because family members can't find a place to rent. Both on disability pension and no-one is going to rent to them. Especially now.
'Subject to sale' contract assuming the seller happy to wait
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this ^^^
also called a "conditional offer".
my parents did this several times when moving over the years. Never had any issues.
For majority of properties/sellers - they are OK … unless lots of potential buyers, or seller needs a quick sale for certain reasons.
For majority of properties/sellers - they are OK …
Disagree, majority are not ok. It could take months or never for the subject to sale property to itself become unconditional. No RE Agent will tell a vendor to accept if there are other potential buyers.
This, I went to an auction 12 months ago and only us and another family showed up. Instead of doing a bid, they talked to both of us then completely ignored the other family because we were unconditional.
Funny thing was it was out of our price range, but had half an hour to kill between looking at properties so went to check it out. Almost talked them down to a price we could afford too before they drew a line in the sand.
hence called a "conditional offer" … eg. if potential buyer can't sell their house within 30 days (or whatever they specify in acceptance offer) … then the buyers offer is null/void.
ALL upto what is stated in the "conditional offer".
[EDIT] : maybe East Coast is backwards … but at least here in WA - "conditional offers" are very much commonplace.
zeggie … RE : your comment … "It could take months or never for the subject to sale property to itself become unconditional. No RE Agent will tell a vendor to accept if there are other potential buyers."
IMO … really depends on offer that is submitted … were there specifics in terms of timeframe for buyer to sell house - until such offer termed null/void ???
if not, why not !!!
I've done this 4 times without issue. It's called common sense and negotiating. Using reputable conveyancers probably helps as well.
It's called common sense
The thing about common sense is that it's not that common
Wouldn't common sense to have been keep all the old houses, borrowing whatever it took to do that, and then easily pay off all the debt after the housing bubble triples the value of all those houses?
I wish. I've noticed prices dropping slightly because of the interest rates hikes.
I look back at the houses my parents sold over the years when they moved and the math definitely says should have borrowed to keep virtually all of them. No matter the interest rates or loan terms, the houses are worth so much more now. Like sold for 120k 20 years ago, and now selling for over a million. Moved progressively close to the city over time. Alas they always kept just one home at a time, the home they lived in. No mini real estate empire for me to inherit.
@AustriaBargain: These days, if we can afford 2 homes, that's an empire in itself. The dream is to keep a second home for the kids. Share with the cousins or something. Save their money and keep them close. I hate getting old.
@BadGiraffe: One extra home is only good if you have one extra kid. If you have three kids you want three extra homes or else they still have to pay some of the bubble pricing.
Okay. Thanks all. This is making sense. At least it's not impossible. I mean… I know it's not impossible, but it's just a big thing, and it's a lot of money.
Also, being a Giraffe, don't stick your neck out. lol
Definitely trying not to.
Basically you either need to ask for early occupation of the new property, or put it in your sale contract that you can remain in occupation after settlement.
If you can't get the parties to agree to that, then you probably have to store your stuff for a day or two.
If nothing that people have said above works, ask the buyer of your property if you can continue staying in the house after it is sold and pay them rent.
So you have to hope the people who want to buy your house, and the people selling the house you want to buy, aren't doing the same as you're doing?
How would I go about doing that?
Try to get a long settlement on what you buy to give you time to sell yours. But you'll still have to live in it etc while doing that.
Or bridging finance. Basically you get a 'loan' at a higher rate to cover your old house and new house. When you sell the old house you close out the bridging loan.
Or sell yours first with a long settlement, giving you time to buy and move etc. But you'll see need bridging finance for this as well.
Last 3 houses we bought were all on bridging finance.
Best and least costly approach is putting yours on the market and start looking at the new one at the same time, with the aim to settle the current one a few date before the new one. Then ask prospective buyers to rent back from them for a week or so. But doing so you might need to be less picky. If not you might want bridging loan option but with current interest rates, you'll pay much more than storage every week not selling the current one.
All depends on the timing of your sale and the purchase of the new property.
When I purchased my current house, it was 90 day settlement but I had already sold the house I was living in at the time and was 60 day settlement. Thankfully the new house I purchased was vacant so made an offer to rent it til settlement which was accepted. Completed a Licence Agreement to formalise this which vendor had me pay lawyers to draft.
When I sold my last PPOR I didn't put an offer in on a purchase until the sale contract was exchanged (NSW). I then made an offer on the property I wanted, and arranged a simultaneous settlement with the sale. It can be a bit tricky if things go balls-up on the day but simultaneous settlements are more common than you'd think. PEXA makes it a bit easier as you don't need a bunch of conveyancers sitting around a table passing cheques about.
Thanks all. There's a lot to consider. Very daunting. Still 50/50 about it. But this is all good information.
It's called a settlement period. Speak to your broker or solicitor for more information, but your conveyancer can generally make this work if you buy and sell within a reasonable timeframe.