Howdy. We're open during all alert levels, operating remotely and our advisers are ready to help. Take care out there!
When you have established yourself on the proverbial property ladder you will at some point come to the decision to move house. According to Wridgways in Australia, the top five reasons for moving house are:
As you can see the predominant factor influencing a move is personal circumstances and not financial in the majority of cases. With this in mind I thought I would explore the question that so often arises:
As ever when it comes to property buying and selling there is never a single, nor simple answer; partly because every purchase or sale is a unique experience with a property that is never the same, nor the specific circumstances of the buyers or sellers.
One fact that favours finding your next home before putting your home on the market is that at any one time only around 1 in every 30 homes is actually for sale, so if you were to make the decision that you wanted to move house in the next 6 months you would have to accept the fact that the perfect house for you may not come onto the market in that period. Worst of all, that perfect dream home might come onto the market immediately after you have bought your next house!
So starting your house hunting early and watching the market regularly is sound advice if your needs are specific and the property you seek is not on the market that often. This fact is partly why there are over 3,000 online searches for property in New Zealand per day.
As ever there is a downside to this approach when the demand is high and houses aren’t on the market for very long. If the property goes to auction, it can lead to incredible stress with the situation requiring a fast process to get your own house onto the market, to be able to bid at auction for your dream house.
There are ways around this though. There’s nothing stopping you negotiating prior to an auction a side agreement with the vendor through the agent to a longer settlement, or even a lower deposit to help and provide you with more time to get your house sold or ease the financial circumstances around the deposit. And of course if it's a standard purchase by negotiation, you can negotiate a longer settlement to allow yourself time to sell. There’s also the option of bridging finance, which is essentially a short term loan on top of your existing mortgage that allows you to buy before selling, making for a smoother process. (We have lots of experience with bridging loans, and can help arrange this).
Taking the opposite strategy of putting your own house on the market first before you go searching can certainly reduce some of the stress.
In doing so you will be able to assess the market demand and price for your property and with a negotiated delayed settlement you could put yourself in a very strong position as a cash-buyer to negotiate a good deal if the market suits that situation.
Clearly though this approach has the negative perspective that firstly you’ll certainly have to restrict your selection of property to just what’s available on the market at that time, and you’ll also have to be wary of a looming deadline by when you’ll have to settle on your own house.
There is no single or simple answer to the question. As ever in both of these situations you will be in the hands of the market – that is a buyers’ market or a sellers’ market.
The best advice is to choose to move when it suits you and your circumstances.
Plan early and watch the market to be better informed as to the trends and state of the market, know what property you want to buy and where.
Get your own house ready to sell and then jump in! The fact is there is no perfect time to buy or sell as you will likely buy and sell at the same state of the market – rising or falling you will benefit in some way and loose out in some way.
Just don’t get stressed into not moving for fear of miss-timing the market.
This article was originally published on 9 September 2013, and updated on 6 August 2020.
Subscribe to our newsletter to ensure you're the first to get the latest articles and insights from the Squirrel team