As the market returns to a more balanced state we are noticing an increase in “subject to” or “conditional upon” sale offers being made. There are a couple of reasons we are potentially seeing this – the finance industry has tightened and securing bridging/short term finance is a lot harder and, generally speaking, properties are taking longer to sell than they were last year.
We would like to suggest that while making subject to sale offers can work out from time to time, there are several really good reasons why you should bite the bullet and get sold before making offers or even before you seriously start looking:
- There is still cash in the market and these offers will almost always be favoured by home sellers over the uncertainty and length of time subject to sale offers can create
- Even if you do manage to get a property under offer conditional upon selling your own home, there is a strong chance you will be faced with an escape/cash out clause giving the owners the opportunity to accept a cash offer should it come along prior to you selling
- The market may change between the time you make an offer and end up selling resulting in you being disadvantaged financially
- Falling in love with a property that you can’t have because you aren’t ready to buy can have a detrimental effect on your purchasing process down the track. It can impact your perception of value or even stop you from making a move on an excellent option because it doesn’t live up to your memory of something you have seen in the past
Our advice is very simple – once you determine that a move is on the cards (for whatever the reason), run through a process similar to this and keep things simple!
- Get a market appraisal on your own home (in fact, get several)
- Head to a mortgage broker armed with this information and determine what your budget will be based on the value of your current property
- Check and see if raising finance against the equity in your own property to purchase is an option (good for you if it is!)
- Have a bit of a snoop around the market and see if your budget lines up with your needs in a property
- Contact your preferred sales person and make arrangements to get on the market and sell
- Try to resist looking at property until you’re under offer – that way you may actually be able to buy if you find something you love!
Expect the number of homes on the market to increase dramatically as we head into spring. If you are thinking of selling, why not beat the rush and get on the market ASAP and then be ready to buy when the supply is at its greatest!