Moving? Should you buy or sell a home first?

07.01.25 | Marc Barlow | Resources

Moving? Should you buy or sell a home first?


Choosing whether to buy or sell a home first is an important decision. Like most tough decisions, there’s no easy answer. The best decision will be influenced by a number of factors, including housing market conditions, interest rates, financial preparation, and your own personal circumstances.

What state is the housing market in?

The health of the real estate market is a critical factor in whether you should buy or sell first. In a buyer’s market – where there are more properties for sale than buyers – selling first may be your best bet. With a nicely presented property and a good campaign, you’ll hopefully sell quickly. And while you mightn’t get the top dollar you hoped for, you’ll at least know exactly how much you have available to fund a new purchase.

On the other hand, in a seller’s market, selling your property first may take a bit longer than expected. It might also make it difficult to find a new home fast – especially one you can afford – since sellers have fewer properties to compete against and, therefore, more negotiating power.

How are your finances?

Your financial condition strongly determines whether you buy or sell first. Selling your present house before buying a new one might offer you with a significant amount of cash for a down payment, making it easier to finance your new home.

However, this approach can also mean you have a gap between places to live. Finding temporary accommodation is tough. Short-term rentals are hard to come by, Airbnbs are expensive and living with your parents isn’t always possible or desirable. And you might also have the added expense of storing your furniture.

On the other side, buying first can save the stress of relocating twice, but it comes with the likelihood of having to pay two mortgages (plus rates, utilities and insurance) until your prior property finally sells and settles.

Selling first: Pros and cons

Pros

  • Financial certainty: You know exactly how much money you have to spend on the next property, avoiding the danger of overcommitting.
  • Stronger negotiating position: You won’t have caveats on any offer you make, and can be flexible about settlement periods.
  • Easier loan applications: Having cash in the bank makes you an attractive option for lenders. You may be able to get better loan deals, and will avoid expensive bridging finance.
  • Less stress: When selling your own property, you won’t be shaking in your boots hoping to get the result you need.

Cons

  • Risk of finding temporary accommodation: You might need to rent or find temporary housing if there’s a gap between selling your old property and buying a new one, which can mean additional costs and the annoyance of moving twice.
  • Market changes: Property prices could rise while you’re between homes, potentially making your next purchase more expensive.
  • Pressure to buy: Urgency can lead to rushed decisions and compromises if you’re looking for an extended period of time.
  • More stress: Selling your home without a clear plan for your next living situation can be unsettling.

Buying first: Pros and cons

Pros

  • Buy your ideal property: Take your time finding the perfect home without feeling rushed by the sale of your current property. This reduces the risk of missing out on a dream property in a competitive market.
  • Snare a bargain: If property prices are rising, buying first means your new place might appreciate in value faster than your old one.
  • Added convenience: Avoid the hassle of moving twice or storing belongings while waiting to purchase.

Cons

  • Financial risk: If your current home takes longer to sell or sells for less than expected, you may face financial strain, and even need bridging finance.
  • Double Mortgage Payments: You may need to manage two mortgage repayments simultaneously. Not ideal!
  • Possible market downturn: If property prices drop after you buy, the value of your current home might decrease, leaving you with less equity than anticipated.
  • Pressure to sell: You might feel pressured to sell your current property quickly, possibly accepting a lower price.
  • Selling your property first provides a clear financial picture and cash for a new down payment, but may necessitate temporary accommodation, incurring additional fees and aggravation.

Talk to an independent expert

Weighing all of these variables can help you make the best choice for your situation and long-term goals. With so much to consider, it makes sense to contact one of our home loan experts at Mortgage Broker Melbourne.

We can help get your financial details in order, advise on suburb-by-suburb market fluctuations, and help find the best loan for your circumstances.

While we typically advise our clients to sell first so they know their future purchasing power, it still makes sense for some people to buy first. Contact Marc and the team for more insights. Our service always comes free to you. Contact us today.