The Blog Should I stay or should I go?

Should I stay or should I go?

How to buy and sell in a competitive market.

With the property market so hot right now, you might think it’s a bad time to sell and upgrade? We talk to potential buyers all the time and many are reluctant to place a ‘subject to sale’ offer in this market. Most people don’t like the idea of falling in love with a new home before missing out on it due to a more competitive offer – one that’s ‘subject to finance’ or cash.

So just how do you go about buying and selling in this market if you own a place? How do you get your ducks in a row and what other options are there for you to consider?

The pre-emptive strike: Sell before buying
This might sound obvious, but you could always put your own house on the market before buying your next place. This way you will know exactly what you can spend after looking at your profit and thus borrowing power with your broker or lender. Having a solid understanding of your budget will mean you know exactly where you stand financially and can place a confident offer on your next dream home.

Avoid ‘subject to sale’ offers
Again, this point might sound obvious but if you’re selling with a view to upgrade you might want to steer clear of ‘subject to sale’ offers. ‘Subject to finance’ and cash offers are always the strongest.

For example, if you have an offer on your home and you’re confident that the conditions of the offer will be met (ie. your buyers’ finance is strong), you could look at making an offer on your future home that is subject to the settlement of your place. This would also help you avoid the 48-hour clause.

Firm up your budget
If you need to sell to buy, the first thing you need to ascertain is your budget. Chat to your broker or lender about your borrowing capacity and get pre-approval before you begin making offers. It will only end in heartache if you find something, and go in guns blazing with an offer, only to find that you can’t get finance approval.

Bridging finance
Depending on your financial position, you might be able to obtain bridging finance to assist in the purchase of a new home. Bridging finance allows you to draw on the equity in your home to purchase another property before selling your existing home. It gives you the ability to stay in your place while finding the next one and is a super convenient option when it comes to moving to a new house.

Not all banks offer bridging finance so it’s best chat to a broker about your options – every bank has a different appetite for what they will and won’t finance. If this is a path you wish to go down, your lender will no doubt carry out a valuation on your home. But before you even begin this process, it’s a good idea to contact a few agents to obtain feedback as to where your home sits in the current market.

Rent your home from its new owners
Another option to explore, if you’re not in a position to secure bridging finance, is the option of leasing your home back from its purchasers while you find a new home. We’ve seen buyers offer this to the sellers in the past and it certainly gives sellers comfort and time to find a new home.

Ask for an extended settlement
The settlement date is when the property exchanges hands from seller to buyer, but as a seller you could always ask for a longer settlement period. This will give you extra time to find your next place.

*Disclaimer: This is general and not personal advice. It’s best to chat to your accountant and/or financial planner for that.


If you’re looking at selling and then buying you should get in touch with us here at Perth Property Co. Nadija is not only the business’ licensee, but she is also a licenced finance broker (Urbanology Finance group ACL389320) and has been helping people source finance for homes since 2007.

Posted under Finance