- Buying and selling a property at the same time is achievable but often requires negotiation, flexibility, and careful coordination.
- Different strategies suit different circumstances, with options ranging from settlement adjustments to bridging finance, each carrying its own risks.
- The right approach will depend on individual finances, circumstances, and market conditions.
Some strategies often used to buy and sell property at the same time are adjusting settlement dates, making the purchase subject to the sale, releasing the deposit early, or renting back the property being sold for a period of time. To make things simpler, home buyer-sellers might consider a bridging loan - a mortgage product designed especially for this purpose.
Can you buy and sell a house at the same time?
If you're a homeowner moving house, you might be wondering if it's best to sell your house first and use the funds to buy a new property, but finding somewhere to live - and keep all your things - in the meantime can be tricky. On the other hand, buying before selling can mean paying two mortgages, sometimes for an indeterminate amount of time. It's no surprise, then, that a homeowner might consider doing both feats at the same time - and there are a number of ways they might do so.
Savings.com.au's two cents
Buying and selling a home at the same time is possible, but requires careful planning and flexibility. Options like adjusting settlement dates, making a purchase subject to sale, releasing a deposit early, or negotiating a rent-back arrangement can help align both transactions and remove the need for temporary accommodation or short-term finance. If timing or cashflow makes things difficult, a homeowner may consider a bridging loan to ease the transition.
Ultimately, whether it's better to buy first, sell first, or try to do both at once depends on personal finances, risk tolerance, and market conditions, and there's rarely a one-size-fits-all solution for such factors.
Adjust settlement dates to buy and sell at the same time
Property settlement is the process of actually selling a home, and the settlement date is the day in which ownership is transferred. And good news for those working to a strict timeline - perhaps to allow for another transaction to settle - they can be negotiated.
Both parties can come together to decide when settlement will occur - whether a matter of weeks after the contract is signed or months in the future. If one property is already under contract with a set settlement date, you might try to negotiate the other to fall in a similar time frame, allowing you enough time to move from one to the other.
Green Shoots Property founder and property negotiator Scott Aggett says settlement dates are probably the most flexible item in a sale contract.
"[Settlement dates] are frequently changed to suit buyers or sellers and form an important part of any negotiation around price and terms," Mr Aggett told Savings.com.au.
Make the purchase subject to the sale
You might also insert a 'subject to sale' clause into the contract for the property you're purchasing, meaning the purchase won't go through until you've sold your existing property. That way, if you can't find a buyer or your own sale falls through, you're not locked into purchasing the new home.
If you want extra protection, you might also include a 'subject to purchase' clause on the property you're selling, so that if the purchase of your new home falls through you don't have to sell your old one.
However, adding clauses (even subject to finance or subject building and pest inspection clauses) may make your offer less attractive to sellers, particularly in a hot market where they may have multiple offers to choose from.
"[A conditional contract is] often open ended time-wise and the deal could fall over as it relies on third party actions," Mr Aggett said.
"It could tie either party up for an extended time period and, in a rising market, that could cost buyers thousands should the deal fall over and you need to start over again elsewhere."
Request for the deposit to be released, helping you buy while selling
Another option that can sweeten a deal is known as a deposit release - though it also poses a risk to the buyer.
"A buyer may offer to give the seller access to the deposit early to assist with their onward plan, while sellers may request access to it for the same reasons," Mr Aggett said.
"This is typically frowned upon by many conveyancers or solicitors as it can expose the buyer's deposit to different set of external risks which would otherwise be mitigated."
In this situation, you would need to include a 'release of deposit' clause on the contract related to the sale of your home, stating the seller can access the deposit paid by the purchaser after the contract has been signed but prior to settlement.
Having this extra cash may be helpful and, depending on the size of the deposit, could even be used to secure your new home or get you over the line in financing both transactions.
Rent your home back from its new owners while you wait to buy
Some buyers may be willing to allow the seller to rent the property for a period of time after the sale has settled, providing the seller time for their next home to settle and allow them to move houses in relative calm.
This is an option Mr Aggett used personally when selling his family home - he rented it back for just over a year while he finished other business.
"We were building locally and wanted to release the equity in our primary place of residence to use as funds for development," he said.
"We listed our home for auction with a contract clause issued to all buyers stating [there would be] a rent back deal at an agreed weekly rental amount for a set period of 15 months. Everyone who offered to buy our home was agreeing to these terms."
Lease-back deals don't have to be so long-standing, however, and they come with their own risks.
"Some buyers may allow a seller to stay on for a short period two to 12 weeks for example at low or no cost to help them transition," Mr Aggett said.
"This latter option is not without risk and is also frowned upon by solicitors or conveyancers acting for the buyer as the seller could be difficult to remove from the premises and become a cost burden to deal with later or worse still damage the property and have no security bond."
Consider a bridging loan to help you buy before selling
If finance is the major reason you'd like to buy and sell simultaneously, you might consider a bridging loan to take the pressure off. These specialty financial products allow a homeowner to purchase their new property using borrowed funds without the need to meet repayments until they sell their existing home.
Once the existing property sells, the owner will use the proceeds to repay a chunk of the bridging loan and the remaining balance will transform into a standard home loan.
While bridging loans can be a useful tool when buying and selling property, they do present unique risks:
- Lenders typically give sellers six to 12 months to sell their property
If it doesn't sell in that time, they might ask the seller to drop the price or take a less attractive offer. - Interest is generally capitalised during the bridging period
This means borrowers are charged interest on interest while they wait to sell their home, and this cost can add up. - Interest rates on bridging loans are generally higher than on standard home loans
What if you're forced to buy then sell or sell then buy?
If none of these methods of selling simultaneously work for you, you're left with two main options: selling and then buying, or buying and then selling.
What if you buy first then sell?
If you choose to buy first, you might need to have enough cashflow to meet two mortgages. This can be a challenging situation and make an already busy time even more stressful. For homeowners facing such a situation, it could be worth considering taking out a bridging loan or renting out one of their properties in order to take the financial pressure off.
What if you sell first then buy?
On the flip side, if you sell first and then buy, you'll need to find somewhere to live for a period of time. You might need to move into a rental, and then move again when your purchase goes through. This is likely a lot of effort and could see you forking out for moving costs twice.
Not to mention, property prices could rise during the period you're in limbo.
Which option is better in different market conditions?
In a flat to rising property market, it's better to secure your next property before selling your own home, Mr Aggett said.
QPIA chair and buyer's agent Cate Bakos agreed that it makes sense to purchase sooner and sell later when the market is moving higher, but that the inverse applies for a declining market.
"General rules can't exist in this situation. Deciding on the purchase or sale order actually depends on two factors: whether the market is moving upwards or downwards, and whether the buyer has the option to hold two properties for a finite period of time (by using bridging finance, for example)," Ms Bakos told Savings.com.au.
"For people that don't have the latter, in a downwards market I'd never suggest buying first, and I'd be wanting assurance of a long settlement if the same buyer was trading in an upwards market."
Ms Bakos said that in a positive market, the fear for many vendors is that they could sell in today's market and purchase in an inflated market.
"If they choose to buy in a rising market and then face a subsequent sale at a later date they could sell advantageously, but then they add pressure to the picture by putting themselves in a situation where they mustmeet a particular settlement date, or settle before their purchase settlement - which will mean that sourcing temporary accommodation becomes a new task," she said.
Key risks to consider when buying and selling property
Settlement delays: If one transaction is held up, it can disrupt the timing of the other and create issues.
Conditional contracts falling through: Subject-to-sale clauses can protect buyers but also increases the risk of a deal collapsing.
Short-term cashflow pressure: Buying before selling can mean covering two mortgages, even for a short period.
Market movements: Price changes between buying and selling can affect affordability and final sale proceeds.
Higher borrowing costs: Options like bridging loans often come with higher interest rates and stricter timeframes.
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
