select
|

Timing a property sale

Anyone who’s ever bought or sold a property knows it takes time – at the moment correctly priced properties in South Africa spend an average of 3 to 5 months on the market (according to a recent Lightstone Property Residential Mortgage Market Overview), and once sold it takes about another three months for the transfer to go through.

So, should a seller sell their property before buying another, or buy the next one first, before selling the current one? “It’s the eternal question”, says Bruce Swain, MD of Leapfrog Property Group, “both options have their own advantages and risks, but all things considered I’d generally advise selling before purchasing another home”.

The risks of selling before you buy

Swain believes that the risks of selling before buying another property are more manageable while the advantages are more beneficial; “Essentially there are two risks when selling your property first: you might find that you’re not able to find and buy the right property as quickly as you’d hoped and while you wait you may need to rent (which is an added cost). Secondly you might find that prices have gone up in the interim and that you’re now not able to buy into a higher or even similar price bracket as before”. 

These risks can be avoided by carefully managing the sale of a current property – it’s possible to extend the settlement date of a property in order to have enough of a time buffer to select and purchase a new property. 

The advantages of selling first

Swain lists a number of reasons why it’s in a seller’s best interest to sell, and then to buy which include:

·         Putting the seller in a stronger position when buying as he or she will have the funds available to purchase a new home – something that’s increasingly attractive to both buyers and mortgage lenders (as the uncertainty around the local economy increases more and more banks are asking for larger deposits).

·         Because the seller doesn’t need to make a quick sale (in order not to pay two mortgages for example) they won’t be pressurised into selling cheaply. 

·         Having time also puts the seller into the stronger negotiation position.

·         Sellers will know exactly how much they can spend on a new property and won’t be dependent on getting the right sales price (to fund the property they’re already in the process of buying).

·         If prices are falling, then houses get more affordable as you wait

While no strategy is fool proof there are a number of things sellers can do to ensure that they don’t end up having to rent while the transfer of the new property goes through, or lose out as the property prices start going up and they can’t afford a similar property anymore. Swain believes that the most important moves are to:

·         Do proper research – it’s imperative to know what the current property is worth and, based on where the seller wants to move to, what’s available in the chosen area within that price bracket.

·         Get pre-approval for a new home loan – this can save valuable time

·         Slow down the selling process by agreeing to a longer period between agreeing to an offer and completing the transfer process as this allows valuable time to find a property and for that transfer to be completed.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 23 Feb 2018
      RE/MAX Property Associates’ Table View Office, which services property buyers and sellers along the Table Bay coastline and surrounds, has recently sold a home in Woodbridge Island for R11 million – the highest price paid for any home in the sought-after security complex.
    • 23 Feb 2018
      Choosing to invest in an overseas property can be daunting. But as more and more investors recognise the value of a diversified portfolio that includes property outside of their own country of residence, international property investment is growing in popularity.
    • 23 Feb 2018
      The positive change in South Africa’s political landscape is paving the way for an upswing in the local property market.
    • 22 Feb 2018
      An excellent credit score is one of the most priceless assets a potential home buyer can have. This tool has the power to secure favorable mortgage and refinancing rate, influencing everything from the size of the loan repayment to the interest rate on the home loan.
    • 22 Feb 2018
      What do you do if you love your home’s location and the area, but the home no longer fits your growing family’s needs? Do you stay and renovate your existing home or find a home that meets your developing criteria?
    • 22 Feb 2018
      While every owner wants to sell their property at the best possible price, overpricing a home can be the kiss of death for a sale.
    • 21 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK