Moving Mistakes: Why Finding A Home Before You Have A Buyer Is A Big Risk
If you’ve decided you want to move, you could be thinking the same as thousands of other homeowners: there’s nothing on the market, so you’ll wait to put your home up for sale until you find your next one
It’s an entirely understandable view, but, from talking to many sellers, it’s clear that they aren’t necessarily aware of all the risks and potential costs of trying to find a property without being under offer first.
A lot of people are missing out on their dream home without ever hearing about it, because they aren’t yet ready to move and can’t compete with other buyers. Meanwhile, for anyone trading up, the gap between their sale and purchase price continues to widen.
Despite all that, homeowners are still holding off putting their homes on the market because they’re worried about ending up with nowhere to live.
So, now those problems are aired, what’s the solution? Before going any further, it’s important to say that nobody expects you to make yourself homeless. But if you do want to move, let’s look at how you can beat the supply shortage and open that exciting new chapter.
KEEPING YOUR HOME OFF THE MARKET SENDS YOU TO THE BACK OF THE QUEUE AS A BUYER
If you choose me to sell your home, my efforts will go into finding you a buyer who is actually able to move. In theory, the estate agents where you’re looking to buy should be doing the same on the homes they have for sale.
So it’s essential to use the current market to your advantage, or you’re likely to end up in one of three situations:
- You won’t be able to view because your own home isn’t on the market and there’s already a queue of able buyers lining up.
- You get a viewing but can’t compete with other buyers who are either under offer or have no home to sell.
- You somehow manage to secure a property by bidding way over anyone else’s offer, but with a strict time limit on getting your own property sold and other buyers snapping at your heels.
In all probability, the last example wouldn’t even happen right now. Most sellers won’t want to risk their move being dependent on you getting an offer, because they have so many buyers to choose from.
SETTING YOUR HEART ON A HOME BEFORE HAVING A BUYER WEAKENS YOUR SELLING POSITION
A lot of homes are selling very fast right now, and many have multiple offers. It’s the perfect position to be in, but there’s a difference between getting an offer quickly, and needing one urgently.
- Even when someone gets lots of offers within a week of hitting the market, it’s often part of a campaign involving a couple of weeks leading up to an open day.
- By generating enquiries in the run up to your launch, you can build excitement, fill a day with viewings, and be sure that you’ve reached everyone who’s looking for a home like yours.
- When you’re up against the clock and desperate to avoid losing the home you want to buy, you’ll replace the luxury of time with the feeling of being pressured.
- If you need an offer fast, you could end up selling for less than if the market had been given the chance to fully work its magic.
People are achieving life-changing sums that surprise everyone, particularly with a well-structured campaign. Put time on your side soyour home can realise its maximum potential value.
UNLESS YOU ALREADY HAVE A BUYER, YOU’LL MISS OUT ON OFF-MARKET HOMES
Not every home that sells makes it as far as the property portals or estate agents’ websites. According to research by Hamptons, there were 37,000 off-market sales in the first three months of 2022 - that’s 10% of the total market.
So who gets to find out about these homes? The buyers who are ready to go. That means those with a sale already agreed, or those with nothing to sell. But even then, how do you make sure you’re on the VIP list of people to call?
- Befriend and stay in touch with local agents in the area you want to move to.
- Have a clear list of non-negotiables (school catchment area, parking, garden size, etc).
- Show flexibility where you can - would you extend to get that fourth bedroom, or modernise a kitchen and bathroom?
Making yourself known, with a bit of charm thrown in, will keep you at the front of estate agents’ minds as their first choice to call whenever an off-market opportunity comes up.
WAITING TO SELL COULD COST YOU THOUSANDS AS THE TRADE-UP GAP WIDENS
You might ask how it’s possible to lose out in a rising market when you’re selling a property. The answer is the trade-up gap.
When they move, most people buy a home that’s more expensive than the one they sell. If you’re selling at £400,000 and buying at £500,000, your current property will rise by £40,000 for every 10% increase in prices, while the one you want to buy will rise by £50,000 - that’s another £10,000 you need to find.
It quite literally pays to move swiftly, and by getting your home on the market, finding a buyer and being ready to offer as soon as a property becomes available, you can keep the trade-up gap between your sale and purchase from widening any further.
THE FOUNDATIONS OF A SOLID MOVE ARE BUILT FROM THE BOTTOM UP
Two of the most important elements of any home sale are stability and certainty. Chains created from the top down have far less of both, and committing to buying a property before getting your own under offer creates a number of doubts:
- You have no idea what position your eventual buyer will be in, how much they’ll offer or how soon they’ll be able to move.
- The owners of the home you want to buy will expect you to move forward, but you might wish to avoid legal and survey fees until you have a sale.
- Another buyer in a better position could offer on the home you’re hoping to buy, putting further pressure on you or even convincing the sellers to switch to them.
Momentum keeps sales together. Chains collapse because people feel they’re going too slow or grinding to halt. By getting the foundations right, you help everyone to feel confident and secure.
Are you holding off making your move?
We’re right in the middle of a classic ‘chicken or egg’ situation, but when it comes to moving home, everything’s better when you’re in the strongest position.
If you’ve decided that you want to move, I’d love to help you get things right from the start. Give me a call on 01722 580059 or email me at firstname.lastname@example.org for a chat about your plans and how to make them happen.
Pennie Gill - Sales & Lettings Manager, Piccolo Property Services