If you’ve tried selling your house with little success, think about how to buy a house when you haven’t sold yours.
In an ideal situation, you shouldn’t begin the search for a new house until you’ve sold your current house first. Yet sometimes the market factors may favour you so that you take longer to sell.
Sometimes the temptation to look around for another property before selling yours is unavoidable. So, you’re wondering how to buy a house when you haven’t sold yours.
If you’re considering buying before selling, your first cause of action is engaging an estate agent that will act fast to sell your house. You could also consider renting out your house to tenants, effectively becoming a landlord. Finally, you can also sell your house to quick house sale buying companies where you’re guaranteed to complete a sale in a matter of days. Most people prefer this option because you’ll no longer worry about being in a chain or even becoming a landlord.
This article provides answers to some questions you have about selling your house when you haven’t sold yours, including some options you can explore.
Let’s get down with it…
Can I buy a house without selling yours first?
Yes. It is possible to buy a house before selling yours first. However, this may mean going for an additional debt that translates to additional risk. Of course, unless you can finance the purchase of a new house without needing external funding.
The other way to look at it is if you can bid on a house before you sell it. While this is also possible, you’ll need to put a timeline on when you must agree on a sale. Overall, buying before selling presents several advantages and disadvantages.
Do I need to sell my house before buying a new one?
It is easy to entertain the idea of buying before selling. However, you must approach it with caution.
The only time you can put an offer on a house if you haven’t sold yours is when you are certain you’ll sell your house fast. The reason here is simple. If you’re relying on proceeds from the sale to finance the purchase of a new home, you must keep in mind that the seller will not wait for you to sell your property, hence they may be discontent and look for another buyer.
Moreover, estate agents too will not pull down the house from property portals until they get to a point of instructing solicitors and show proof you have funds.
If you’re considering putting an offer on a house if you haven’t sold yours, then you should have alternative funding sources. This comes with the following pros and cons.
The Advantages
- You stand a better chance of getting your dream property because your purchase decision is not pegged on the sale of your property.
- There are minimal chances of getting gazumped as you’re less of a risk to the seller given that there’s minimal risk of the sale falling through.
- You’ll be less stressed since you’ll no longer worry about being in a chain.
The Disadvantages
- You must factor in Capital Gains Tax on the property.
- You’ll pay more on stamp duty because the house will count for a second home
- You certainly will need to have a significant pool of funds or demonstrate ability to afford repayments for a second house if you decide to get a mortgage.
How to buy a house when you haven’t sold yours UK
What do you do when you can’t afford having two homes, yet you can’t sell your house but still want to move?
There are several approaches you can take. First, consider letting your old house to tenants. This will help you to cover its costs and take up the role of a landlord. If you take this path, you must be ready to take responsibility for your tenants as well as take charge of the maintenance of the property should anything go wrong.
Alternatively, you can sell your house fast to a quick house sale company, letting them become the landlord. Here, they will take care of all related responsibilities.
There are several options you can explore when you find that you want to buy a house when you haven’t sold yours yet in the UK. These mostly apply to Wales and England because they differ slightly in Scotland.
Consider the following options:
- When you think about buying before selling, you want to consider getting a bridging loan. Although these loans are expensive, bridging loans help you move forward with your goal of buying a house.
A bridging loan will help you to keep your home on the property market while you acquire another one. If you take this option, you’ll be borrowing on the strength of the equity of your existing home. This means you will repay the bridging loan along with other lending tied to your current house from the proceeds of the sale.
- You can also opt to keep the house but convert it into a rental property. This means you’ll assume the role of a landlord, so you let your house to tenants. Following this path will be determined by how keen you are on becoming a landlord. This is not usually for everyone. However, it is a great option for the simple reason that you don’t have to stress about being in a chain. If you choose to become a landlord, you must understand the implications of your decision beforehand.
- Engage an estate agent with a track record of acting fast. This is one of the things you need to do to sell your house fast. The challenge with this is that the outcome is a result of market forces. This may also mean finding yourself in a conveyancing chain. Additionally, you must get down to pricing your house realistically; price to sell.
- Sell your house fast to a quick house buying company like Ready Steady Sell. Quick house sale companies will buy your house as it is and complete the sale within days. This option is best if you want quick action. That is, you don’t fancy the idea of being a landlord or even being stuck in a chain. You see, the guarantee here is that you’ll sell your house fast.
So then, can you put an offer on a house if you haven’t sold yours? Well, whichever option you prefer between letting your old house to tenants and selling to a quick house sale company, they both get you closer to selling your house.
If you get a new dream house, you can engage a trusted estate agent to sell your house fast. Even then, there’s no guarantee that your house will sell fast enough to finance the purchase of your new home. It can get more complicated when the seller you’re buying from doesn’t take the property off the market at least until you confirm the sale.
If you choose to retain your house and let it to tenants, you cease to be in a conveyancing chain. This effectively puts you at an advantage of buying before selling. Here’s the truth; a chain free buyer is often more attractive than a buyer who is part of a chain when selling a house. As such most sellers will shun the idea of accepting an offer from you if you haven’t sold your house first.
Can you put an offer on a house if you haven’t sold yours?
You may be wondering, what if I come across my dream home before I sell my house? Can you go ahead and put in an offer?
You can make an offer on a house in Wales and England if you haven’t sold yours. Even then, keep in mind that sellers of the house are not obliged to accept your offer. Some sellers will not accept your house until you sell yours. This means the sale won’t go through. Instead, you’ll just annoy the seller and estate agent by wasting their time.
Most estate agents will advise sellers against accepting an offer from you until you sell your house, thus the house will stay on the market and may be sold to another person.
What is a typical sale process like when you want to buy a house when you haven’t sold yours?
By now, you already know that buying your next house before selling your old house doesn’t follow the regular sale process. Here’s what to expect if you don’t know how to buy a house when you haven’t sold yours:
- Look for an estate agent with a record of selling properties fast to market your property.
- Agree with your estate agent on the sale price of your house.
- Get a professional photographer to take pictures of your property.
- Let the estate agent list the house in some of the popular property portals.
- Make plans for viewings. You can do it yourself or ask the estate agent to do it on your behalf.
- Once you have found a suitable buyer who makes a bid on the house, you could negotiate the price and agree.
- Agree on the sale price.
It’s only after you’ve agreed on the sale price for your old home that you can begin a search or bidding for another property, keeping in mind that you’re depending on the proceeds of the sale to pay to purchase a new property. When a seller accepts your bid for a property, you effectively become part of a property chain.
Why you must pay attention to market conditions when you want to buy a house when you haven’t sold yours
You must always conduct a thorough research into the market before buying your property before selling. This is because the whole concept of buying a new home before selling your own house is an enormous risk. This may mean borrowing more money. Otherwise, you may risk your purchase falling through should your house take too long to sell.
You will do well to research a little on just how long it will take to sell your house in your locality with the help of the many tools that are available. Knowing what to expect puts you in a better position on your next move. If your house is in an area where properties sell fast, it is likely that you will get away with the sale at a low cost. However, this is not to say that you eliminate the risk.
Bottom line…
Although it is possible to make an offer or even buy a house without selling yours first, you must be ready to understand the process and the options you can pursue. This will help you know how to buy a house when you haven’t sold yours so that you only make a calculated move.
