Buying and Selling At The Same Time

Buying your next home while selling your current one can be exciting, but it also requires careful planning. Below are key points to keep in mind to ensure a smooth process. 

Your Deposit Must Be Cash

• When signing a Contract of Sale for your new home, you must provide a deposit in cash savings. 
• A bank will not release funds for a deposit, even if you have equity in your existing property. 
• If your agent or conveyancer does not ask about this, be sure to raise it yourself and discuss with your mortgage broker the best way to manage this. 

If you do not have your deposit in cash and have not disclosed this, you may be in breach of your contract. 

Coordinating Your Sale and Purchase 

In a perfect world, both transactions settle on the same day. While this does happen, it’s not common without careful planning. Options to help manage the process include: 

• Extend Settlement Periods – Allow more time on one or both contracts so the dates align. 
• Make the Purchase Subject to Sale – Negotiate a clause that makes your new purchase conditional on the sale of your existing property. 
• Bridging Loan – Short-term finance that covers the gap if you need to buy before your current property settles. 

Practical Considerations 

• Buying First, Selling Second: You may face the cost of two mortgages for a period. 

• Selling First, Buying Second: You may need temporary accommodation or pay rent, plus move twice.

• Simultaneous Settlement: Possible but requires proactive management and a bit of luck. 

Key Takeaway 

The smoother your planning, the fewer surprises you’ll face. Speak with your broker early to confirm your deposit position, settlement timelines, and finance options so you can approach agents and conveyancers with confidence.