Have you ever wondered if it’s worth putting in an offer on a house before selling yours?
Say you’re thinking about a house move in Wandsworth, Tooting or Balham – maybe for more space, a bigger garden or an easier commute. You haven’t quite put your house up for sale, but you’re eager to see what the market has to offer.
At first viewing you find your dream home – a stunning property in the right area for your preferred schools with lovely gardens and plenty of light. Everything about it screams YES … but should you act before you’ve sold your current property?
The answer is that it depends on market conditions, your vendor’s situation and the level of interest in the property – and if it’s as special as you think that is probably high. As estate agents we are obliged to inform our sellers of all the offers we receive. However, if you make an offer without selling your own property, we and the sellers are unlikely to take you as seriously as a cash buyer or someone who has had an offer accepted.
To help you get to grips with the situation, and decide what to do next, we look at the issues around making an offer on a house before selling yours in the UK and suggest a few solutions.
We don’t usually advise making an offer before selling. If your vendor has also received offers from cash buyers, first time buyers with a mortgage offer or people who have already sold, they are unlikely to go with you. They want the sale to move along as quickly and smoothly as possible, and you aren’t ready to proceed yet, so you will be far down the list of suitable buyers. Even if your offer is accepted, your buyer will be less likely to negotiate on price and more likely to pull out if a better offer comes along.
Our advice would be to act fast to get your home on the market. This will also give you a reasonable sense of how much your home is likely to sell for and mean you can get your finances in order.
Whether or not you can successfully put in an offer on a property before selling yours does come down to market conditions. In a hot market with plenty of demand and lots of buyers, you are unlikely to be successful because there will be other, more enticing buyers out there. In a buyer’s market where properties are moving more slowly, your seller may be glad to have some interest in the home and be more amenable to waiting. It also depends on your seller’s motives for moving. If they need to do so quickly, or are in a chain themselves, they are less likely to be willing to wait and see what happens with your sale.
If you do want to go ahead and put in an offer before selling your home, there are things you can do to maximise your chances of having it accepted.
Having an agreement in principle shows you are committed to the move and that a lender is willing to give you the money to afford the home.
Make sure you choose the right agent with a good record of selling in your area, and let them know you are keen for a quick sale to help you secure your dream home. Do not make the mistake of pricing your property too highly, as this will put buyers off and slow things down.
Bridging loans are short-term interest-only loans that give you the cash flow to buy without selling. If you are able to get a bridging loan, this is something to consider – but remember that they come with high rates of interest. You need to be pretty confident of selling your home relatively quickly to pay off the loan before it becomes too costly.
Renting out your property is an option, at least in the short term, if this is affordable for you. You may need to convert your current mortgage into a buy-to-let product and get an agreement in principle on a second loan.
If your offer is accepted or you manage to sell your own home quickly, you will find yourself in a property chain. Chains are groups of linked buyers and sellers who are all dependent on each others’ transactions to be able to move. They start with a first-time buyer and end with someone who is selling without buying.
People get stressed about the idea of chains, but they don’t have to be problematic. The vast majority of chain transactions go through perfectly smoothly every day. To help make sure yours does, our tips are:
Move quickly at every stage of the selling and buying process so you aren’t responsible for holding up the chain – this means having your mortgage approval ready, instructing a solicitor or conveyancer as soon as possible and moving ahead with your survey.
Have all your documentation to hand – make sure you have all guarantees, certificates and other paperwork ready when asked.
Be a good communicator – complete your sellers’ questionnaire on time and respond to other requests from your solicitor and estate agent.
Use the right local estate agent – choose wisely when selling, looking for an agent with a good record of finding buyers in your area and moving complex sales along well.
Hire a good conveyancing solicitor – the same goes for your conveyancer – get personal recommendations and read reviews.
If you are looking to sell in Wandsworth, Tooting or Balham talk to us. We have plenty of experience of the local market and will help you develop the right strategy to make your moving dreams come true. Book a market appraisal for your home today.