At the same time, buying a property is always a financially important operation: becoming a homeowner is often a life project. And if it is necessary today to have consequent funds to acquire a property, a question often arises for the purchasers who are already owners: should one sell before buying or buy before selling?
Both solutions have their advantages, disadvantages and some risks. But as we will see, it is often better to sell before buying or to make a forward sale to secure your new project.
Solution 1 - BUY A PROPERTY BEFORE SELLING YOUR HOME OR APARTMENT
A seemingly attractive solution
By purchasing a property before selling your home, you will not have to find a temporary place to live. By extension, it will not be necessary to move several times. In addition, once the purchase of the new home is completed, you will be able to move on to the sale of your old home with more peace of mind.
This solution also allows you to have more time to think about the house you want to buy and to find the best offers.
But difficult to achieve in reality
Of course, if you have to buy a property before selling another one, it is essential to have sufficient funds. You will need to have the equity to purchase a second home and the income to take on new mortgage debt! In addition, you will be owning two homes at the same time, which will involve significant costs. And you won't have any guarantee of how long your first property will be sold, which could put you in an uncomfortable situation...
To summarize, this first solution is therefore reserved for the rare cases of owners with really substantial funds.
Solution 2 - SELL YOUR PROPERTY BEFORE BUYING A NEW ONE
Selling before buying is the safest solution
As the number of vacancies on the Swiss market is very low, you will generally succeed in selling your property within a short period of time if you are well accompanied. You will also avoid the additional costs of carrying two properties at the same time.
By selling your property before buying another one, you will also make sure that you know exactly how much money you have available for the purchase of your new home. You won't need to make estimates that could end up being too optimistic and put you in a difficult situation.
sell and buy simultaneously with a forward sale
The forward sale is a solution that allows you to look for a new home after selling yours while continuing to live there for a few months.
The forward sale offers the possibility of deferring the sale through the payment of a deposit (about 10%) by the buyer, when signing the deed of sale.
The buyer thus enjoys a right of emption which gives him a right of "reservation" on your property. He will officially become the owner when he pays the full amount, at a date agreed with you. This gives you time to organize the purchase of your new residence and to make this date coincide with the date of the sale of your current home!
sell, rent, then buy
The main disadvantage of this solution is that it implies finding another home to rent while waiting to acquire the new property. This often leads to additional expenses, but above all, a double move.
By selling, renting and then buying, you also have to take into account the storage of all the furniture while waiting for the move to the new property.
Which solution to choose?
Anticipating the purchase of a new property by selling your current house or apartment in advance will surely be the least risky solution financially.
This is why we advise you to sell before buying in order to have the necessary funds. The forward sale is then one of the solutions which are offered to you to guarantee you a sale under control.
Whether you wish to buy or sell a property, the Immo Plus team will accompany you in your project. Do not hesitate to contact us to discuss your real estate project together.