It’s a great feeling when you put the ‘Sold’ sticker across the signboard on your home and have found a motivated buyer who can’t move in fast enough.
Now, you face a big question: should you begin a deadline-driven search for a new home and risk rushing into a deal, or find a rental and take your time.
At first glance, renting seems the sensible option. If you’re moving to a new area, then you’ll be able to test your choice of new location as well as find a new home without having to watch the clock. What could go wrong?
But there’s two dangers. The first big danger is home price inflation. If you rent and stay out of the market for too long, it’s possible prices will rise, and the location and style of home might disappear beyond your financial reach. The second thing to consider is the state of the rental market. It’s also pretty tight at the moment, so you could spend just as much time looking for a place to rent as to buy.
Below is a quick guide to help you consider the key issues and perhaps adopt a few preventive actions that can help ease stress.
- Know your markets – Research both sales and rentals in your current area and the suburbs you’d like to move into. Understanding the dynamics of both these markets will help you make a more informed decision about whether to rent or buy as quickly as possible.
- Check the rental market – Don’t assume you can easily find the style of property you need as a rental. Be sure you know where to land once the sale of your property has gone through.
- Extend settlement period – You can negotiate with your buyer to extend your settlement period to give you the best possible chance to find your next dream home. This is a common request, and it’s possible your buyer will be happy for an extension, too.
- Rent your own home – This is a rare event but can be negotiated. You can ask the next owner to rent the home back to you while you complete your own property search. This will also ease the pressure on you to buy quickly.
- Avoid buyer’s remorse – Home price inflation isn’t the only danger. A rushed transaction can lead to buyer’s remorse. Choosing the wrong property for your next home can prove to be an expensive error, forcing you back into the market.