When you are selling your home, you are probably in the process of buying as well. Sometimes, the situation will arise where you find your ideal place and need to make an offer before you sell your existing home.
Performing these two tasks simultaneously can be daunting because you don’t want to end up with nowhere to live or with two mortgages on your hands.
Take a look at some solutions which can make it easier to buy before you sell:
Deposit bonds
When you are purchasing a home, you are expected to hand over a cash deposit, usually 10% of the purchase price. Of course, if you are still in the process of selling your home, coming up with this cash can be a tall order.
That’s where a deposit bond comes in.
A deposit bond (also known as a deposit guarantee) is a form of insurance policy. It is a guarantee to the vendor that you will be able to pay the deposit when settlement comes.
Deposit bonds are available from a wide array of sources, including banks and other lenders. However, they are most commonly issued by insurance agencies. There is usually a fee involved to cover the costs.
Be aware: not all home sellers will accept deposit bonds. Have a discussion with the selling agent to find out if your deposit bond can be accommodated.
Bridging loans
The other option to deal with the gap between buying a new home and selling your existing one is to take out a bridging loan. This is a short-term solution that works by giving you a ‘double loan’ of sorts, for a period of 6-12 months.
Of course, a bridging loan means you will take on more debt but there may be an interest-only payment arrangement which reduces your outgoing costs.
A qualified mortgage broker will be able to provide specific advice about your options when it comes to a bridging loan arrangement. It is important to understand the terms and conditions of the bridging loan you choose before you sign on for it.
Extended settlement period
Before you buy your new place, you may wish to negotiate an extended settlement period. This will give you some more time to sell and it will give the person selling to you extra time to find and buy their own property.
Talk to your agent and solicitor about the possibility of settling over eight or ten weeks instead of six.
An understanding real estate agent
If you have found the home you want to buy, made an offer and had it accepted, you will need to sell your existing property sooner rather than later.
When you work with an experienced local agent and explain your circumstances, you will be able to arrange a speedy sale, for a price you are happy with. Your agent will understand the urgency and do everything they can to bring a motivated buyer to your door in as little time as possible.
Need to sell in a hurry? Contact me today at teresa@teresaberger.com.au .
