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Selling a house or buying a new one can be a huge undertaking that requires a fair amount of due diligence and meticulous planning. However, selling and buying a house at the same time is not only more complex but also requires a fair bit of real estate and financial acumen. You will also need to time everything perfectly to ensure all the pieces fall in the right place at the right moment. Otherwise, you may get stuck without a home for an extended period of time or end up accepting a lower offer on your property due to the financial strain of owning two houses.
In theory, selling and buying a house at the same time seems like a wonderful solution for those looking to upgrade to a bigger home or move to another neighbourhood. Many homeowners start looking for their next dream home with plans to put their current house on the market, sell it quickly, and use the proceeds from the sale as a down payment. Nevertheless, things do not always go so smoothly. More often than not, people experience some overlap as they navigate the real estate market as both the seller and the buyer.
In simpler words, the process of selling your first home and buying your second can be rather unpredictable. However, if you think strategically and act according to a plan, you may be able to face the challenges of selling and buying a house at the same time a bit more easily.
So, if you are already a homeowner who is planning to sell your house to buy a new one, you have three main options: you can either sell your home before buying another one, buy a new home before selling the old one, or do both simultaneously.
Let’s take an in-depth look at all three options.
Selling a House Before Buying
Your first option is to sell your existing house first before browsing the market for your next dream home. If you choose to go this route, you will be able to search for your next abode without worrying about the down payment and other hidden costs of owning a house in Pakistan. Moreover, with the sale proceeds in hand, determining the budget for a new house will become much less complicated. You will know exactly how much you can afford to spend and save for closing costs.
On the flip side, selling a house before buying a new one can potentially leave one homeless. Imagine if you are able to sell your home quickly but can’t find a property that fits your budget and lifestyle choices, you will likely have to move in with a relative or rent out a unit while you continue your search. If you have a large family or own a few pets, finding a new home on such short notice can be a tall order, to say the least. Furthermore, if you have a lot of belongings, it will be extremely inconvenient to move everything in your home to a rental unit and then eventually move it to your new home.
Living in a state of limbo without a permanent place to call home can be pretty tough. It may also make your feel rushed, which may result in you buying the next house you see – even if it doesn’t match your requirements. It is also worth mentioning that renting between selling and buying can also put a strain on your finances.
To sum it all up, here are the pros and cons of selling a house before buying one.
Pros
- Much less stressful
- Lesser financial strain
- Frees up money for the purchase of the new home
Cons
- Could leave you homeless for months on end
- Doubles the moving costs
- Make you feel rushed to buy the new property
Things to Consider When Selling First
Here are a few things you must ask yourself if you decide to sell your existing home first.
- Where to live between selling and buying?
- Do you have the financial resources to rent out an apartment or a house for temporary accommodation?
- Have you narrowed down your list of nice-to-haves and non-negotiables for the new house?
- Do you know which neighbourhood would be more suitable for you and your family?
- Are you planning to work with a real estate agent to fast-track your house hunt?
- Have you set your budget and listed down your preferences for the new place?
In addition, you must also consider the pros and cons of investing in a new house vs. an old house.
Buying a House Before Selling
The second option is to buy a new house before selling your existing one. While many homeowners would probably like to choose this option over the other two, the truth is that not everyone has enough financial resources to purchase a second property. Even if you somehow manage to acquire your second home while waiting for your current home to sell, you will likely have to pay for the maintenance and upkeep of two properties for an extended period of time.
Nonetheless, buying a house first comes with a lot of perks. For instance, you can move into your new dream home at your own pace without any pressure. Moreover, you will have to pack and unpack your belongings only once, as opposed to doing it twice if you choose the first option. Secondly, you won’t have to worry about being homeless or spending money on temporary accommodation. After all, renting between selling and buying can take a huge chunk out of your savings. Furthermore, buying a house first is a great option for those on a tight timeline.
However, when it comes to finances, selling your first home and buying your second can be quite less stressful than its alternative. Buying a house first means you would have to dig into your retirement fund or apply for a home loan in Pakistan. In either case, this move can put a strain on your financial resources and affect your quality of life. The cost of owning two properties may also start to catch up after a certain period of time, possibly rushing you into accepting a less than ideal offer on your house.
To summarize, here are the pros and cons of buying a home before selling your existing one.
Pros
- No rush to find the perfect home
- Won’t have to worry about being homeless or looking for temporary lodging
- Will have to pay for moving expenses only once
Cons
- You may have to pay for the maintenance of two homes for a certain period
- Possibly harder to qualify for certain home loan programmes
- Financial stress may result in you accepting a lower offer on your property
Things to Consider
If you choose to buy a house first, please ask yourself these questions:
- Do you have the financial resources to fund the purchase of a new house?
- Can you maintain two properties simultaneously while looking for a buyer?
- Are you eligible to apply for a home loan to buy your next dream home?
Tip: If you are unable to find a suitable buyer for your old place, you may want to turn it into a rental to generate a second stream of income. Don’t forget to take a look at the dos and don’ts of buying a second home for rental income as well as our guide on how to prepare your property for a tenant?
Selling and Buying a House at the Same Time
Your third and final option is selling and buying a house at the same time. Though it sounds complicated (and extremely daunting), there are a few ways you tackle this complexity without losing your peace of mind.
While buying and selling a house on the same day may be virtually impossible, you may still be able to achieve your goals within a short period if you put in a lot of effort and make sure to time everything perfectly. For starters, you can try streamlining your search for a buyer and a seller by working with a reliable estate agent. Some of the main reasons you need property agents in Pakistan are as follows:
- Real estate agents have a ton of connections and know exactly what to look for
- Experienced agents know all about the latest real estate trends in an area, which makes them rather beneficial when it comes to setting a price
- Property agents are great at negotiating a better deal for their clients
- These agents understand the fine print on all property-related legal contracts
Needless to say, these qualities of expert realtors can come in handy when selling and buying a house at the same time. Furthermore, here is a list of important questions to ask your real estate agent when selling a property in Pakistan.
To conclude, there is no right or wrong when it comes to choosing between the options mentioned above. You should ideally set your sights on selling and buying a house at the same time. However, if that doesn’t work out, please make sure you have a contingency plan ready.
You can also check out the latest listings on Zameen.com – the best real estate portal in Pakistan – to find out all about the house for sale in your preferred neighbourhood. Moreover, you can post a property ad on Zameen.com to attract a large number of prospective buyers and investors.
Before we conclude this comprehensive guide, here are a few blogs that you may want to check out next:
- How to Sell Your Property Quickly in 2022
- How to Take the Perfect Listing Photos to Sell Your Home Faster
- What To Do If Your House Is Not Selling
- Pros and Cons of Buying a Newly Constructed House
- 7 Ways to Save Money for Buying a House in Pakistan
Please stay connected to Zameen Blog for more tips and suggestions on buying and selling property. You can also share your thoughts and suggestions for selling and buying a house at the same time via email at blog@zameen.com. Additionally, don’t forget to like our Facebook page to receive the latest updates on the best areas to invest in your city.
