Making an offer before selling your existing home

Making an offer on a house before selling yours is possible, but it can be a risky strategy.

When it comes to accepting an offer on a property, many sellers will only consider offers from chain-free buyers or those who have already accepted an offer on their existing property. If you’ve not yet sold your existing property, you will be unable to offer the seller any indication of when you may be able to move forward with the purchase, as you’ll have no way of knowing how long it will take to sell your property. In reality, any offer you make whilst you still have your existing property to sell is a hypothetical offer. Many sellers will be reluctant to agree to a sale that you’re not immediately able to progress with.

under offer sign outside a house

Benefits of accepting an offer on your existing property before making an offer on a new one

You’ll be free to view any property you like

If a property is getting a lot of attention, sellers and estate agents may be reluctant to let you view the property until you’re in a proceedable position. This means either being a chain-free buyer or having accepted an offer on your current property.

Once you have accepted an offer on your existing property, you will be ready to move forward with a purchase. At this point, you will be able to view any property you want.

You’ll have more negotiating power

If you’re planning on making an offer on a house before selling yours, you should consider how much power you will have to negotiate a good price. When you’re a chain-free buyer, or have already accepted an offer on your current property, your negotiating power comes from your ability to commit to the purchase and how quickly you’re able to move. If you’ve not yet sold your current property, you will have little negotiating power. Even if you agree a price with the seller, if you’re unable to find a buyer for your own property the seller is likely to pull out of your agreement in favour of an offer from someone who is in a proceedable position.

The seller will take you seriously

Making an offer on a house before selling yours may mean that the seller does not take your offer seriously. It may also impact any further offer you go on to make once you have sold your existing property. If you really want a seller to consider your offer against those coming from other buyers, you will need to have sold your current property.

It will enable you to secure your next home

Gazumping – offering a higher price for a property after a sale has already been agreed – is on the rise. In addition to this, around one in three property sales will collapse after being agreed. Making an offer on a house before selling yours means that the odds are stacked against you. If you’re serious about securing your next property, you’ll need to do everything you can to stop that sale collapsing. This means proceeding swiftly and making the process as stress-free for the seller as possible. This simply isn’t possible if you still have another property to sell before being able to proceed.

You will be able to accurately budget for your next property

Until you’ve found a buyer, it’s difficult to know how much you can afford for your next home. Your current property may sell for more than you were expecting, providing you with a bigger budget. Alternatively, you may have to drop your asking price to attract a buyer. If that happens, the property you’ve made an offer on may become unaffordable.

You can move forward with your purchase

Until you’ve got a buyer, it would be incredibly risky to progress the legal aspect of buying your new home. As soon as the formal conveyancing process starts, there will be a cost involved. If things don’t go to plan and the purchase of the new property falls through, you’ll be out of pocket.

Do market conditions affect making an offer on a house before selling yours?

The short answer is yes, they can do.

In a seller’s market, there are more buyers than there are properties. This means buyers are competing against each other to secure each desirable property. In this type of market, a seller is less likely to entertain an offer from someone who isn’t proceedable.

If you’re in a buyer’s market and there is a surplus of properties available, a seller may be more willing to consider an offer from you. However, they may set you a deadline for finding a buyer in order to move forward with your offer. You should also consider that even if a seller accepts your offer, there is nothing to stop them pulling out. If they get an offer from a more proceedable buyer, it would make sense for them to switch. Neither party is legally committed to the sale until contracts have been exchanged. This means your purchase would be far from secure if you’re not proceedable.

I’ve found my dream home – can I buy it before selling mine?

If you’ve found the home of your dreams, but haven’t yet sold your current property, you do have a few options.

Bridging loan

A bridging loan is a loan you can take out that will enable you to purchase your next property while you’re still waiting to sell your current property. A bridging loan is a secured loan, which means your property will be at risk if you fail to keep up with your repayments. It’s not something to undertake without due consideration. What will you do if you don’t achieve as much for your current property as you hope you will? Can you afford to cover your mortgage payments and loan repayments?

Cash house buyer

If you would struggle to afford mortgage repayments and a bridging loan, or you simply don’t want the hassle of a cross over with the two properties, you could consider a quick, guaranteed sale to a genuine cash home buyer. A cash home buying company doesn’t rely on investors or mortgages. This means they can purchase your current property in as little as a week.

Rent out your current property

If you’re struggling to sell your current property, you could consider renting it out. To do this you would need to change your current mortgage to a buy-to-let mortgage. You will need a deposit to buy your next property, so you’ll need to have a way of doing this.

Ultimately, it may be possible to make an offer on a house before selling your existing home, but you will always be in a much weaker position than someone who is chain-free or has already sold their current home. If you are serious about the property you hope to buy, it would always be advisable to ensure you’re in a proceedable position before making an offer.

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Author:

Beth Lane

Beth Lane

As an integral part of the marketing team, Beth is responsible for creating Quick Move Now’s external communications and dealing with national and regional press enquiries.

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