Selling and Buying at the same time

Welling your existing home at the same time as buying your new dream home can create a challenge. This situation can be even more complicated now when most homes sell by way of auction, which means unconditionally.

Here are several options for you to consider:

  1. Long Settlement
    You list and sell your home by way auction and ask for a longer settlement period of say 3 months. You can put a clause on the auction document in line with ‘Settlement on such date or prior by mutual agreement.’ After your house sells at the auction you can bid at auctions and buy unconditionally. This will give you around 4 weeks, which is the auction campaign to sell your house, plus your 3 months to settlement to find your dream home.
  2. Variation to auction agreement
    You might prefer to buy your dream home first. If have chosen your dream home and it will be auctioned soon you can ask the vendors to vary the terms of the auction agreement to extend the settlement to say 3 months. If the vendors agree and you win at the auction you are committed to buying this home and need to sell yours.
  3. Taking chances the auction does not sell
    If your dream home is to be auctioned there is always a chance it will not sell. If you are prepared to take chances then straight after the unsuccessful auction you might be able to make an offer conditional on you selling your home.
  4. Selling your home conditionally
    You might choose to sell your home by way of listed price or negotiation and put a clause in the sales agreement stating that this sale is conditional on you buying your dream home within a certain period of time.

All options have their pros and cons. For example, option 1 might lead to a situation where you might rent for a while if you are very particular about your new dream home and fail to buy it in time. Option 2 might mean that you will be pressured to sell your home otherwise you will end up having two homes on your hands. Option 3 might lead to you missing out on your dream home if it either sells at the auction or your competitors will have better conditions on their after auction offers. Option 4 would substantially reduce the attractiveness of your home to any potential buyers and make it harder to sell.

Based on the above considerations most people, in my experience, prefer option 1.