Buying and Selling a House at the Same Time
Selling a property can be seriously stressful – and so can buying one straight off the market. With both processes, there can be a lot of paperwork and agreements involved, and without the right advice there’s a lot of room for error that can string out the process even longer or even result in you losing money.
If you’re thinking of buying and selling your house at the same time, read our comprehensive guide below.
In this article
- Should I sell my house before buying?
- The process of selling and buying a house
- How much does the process cost?
- Potential problems when buying and selling a house at the same time
Should I sell my house before buying a new one?
Selling your house before buying a new one can definitely be advantageous, but you’ll have to be super organised and make sure everything is in place in order for you to complete the process one after the other, rather than buying and selling at the same time.
Benefits of selling your house before buying a new one
- Non-sale dependency: If you put an offer in for a home but you have some competition, the seller and their estate agent will often favour your offer as you’re “non-sale dependent”. As you don’t have to sell your home in order to buy theirs, you are offering a more stable and easier offer.
- Easier to get a mortgage: Brokers and providers will be more likely to offer you a mortgage if they don’t have to service your old one. Once you’ve sold up, it’s a simpler process to just apply for one new mortgage, than have an old one that needs to run over.
- No onward chain: Just as no-sale dependency is attractive while buying, a no onward chain is attractive when selling – buyers of your home can simply purchase your home without waiting for your next purchase to be complete.
- Less stress: If you’re not completing two big processes at the same time, as you would when selling and buying a house at the same time – it’s likely you won’t be as stressed. Plus, if you’ve completed the sale of your home before you begin looking for a new one, put more thought into the next place you want to go.
- Maximum bid: When selling and buying at the same time, it can be a little tricky – you don’t know for sure the maximum bid you can afford. If you sell up beforehand, you have the amount in the bank and know how high you’re willing to bid.
Disadvantages of selling your house before buying a new one
- Finding accommodation: One obvious factor of selling before buying is accommodation. Once your house is sold, you’ll need to find somewhere to stay until you buy a new one. This will usually involve staying with family or renting – but bear in mind six months is usually the minimum contract term for this, and rent amounts are higher than mortgage payments
- Accepting offers: Without looking towards a home you want to buy, you can often find yourself in a longer selling process, trying to receive the best offer – rather than taking one that would allow you to move on. While you may end up with more cash, the process can be drawn out and essentially unnecessary
- Rising house prices: If you decide to sell first, instead of buying and selling a house at the same time, it might be a while before the perfect property crops up. You could find yourself settling for a property that’s not quite right – or being prices out by rising values by the time a great property comes along
The process of selling and buying a house
It’s common for homeowners to sell their current home and buy a new one at the same time – but if it’s your first time, it can be a confusing process to navigate.
Arguably, buying as part of a house chain is the most complicated way to move home – but don’t worry – we’re here to break down how exactly the process works for you:
- Get your property valued
- Assess your property’s equity and review your finances to figure out what exactly you can afford
- Ask a mortgage broker what’s available to you in terms of your old mortgage and a new one
- Put your house on the market and begin your property search
- Choose your next home and have a property survey
- Discuss the survey and any issues with your broker
- Put an offer down on the home – this will only usually be considered if someone has placed a bid on your own home beforehand
- Employ a conveyancing solicitor to conduct property searches and contracts
- Involve your estate agent and instruct them to nudge the process along
- Get a completion date
When buying as part of a house chain, offers and bids on your own home can often determine success. The admin processes are often quite long too.
How much does the process cost?
It’s impossible to say just how much selling and buying a house at the same time will cost, as it depends on an individual’s situation.
For example, you might need to invest in improvements to the house you’re selling and the one you’re buying, or you might have to pay fees such as Capital Gains Tax.
However, we’ve provided a run-down of the most basic costs that more than likely to occur if you’re buying and selling your houses with a traditional estate agent. Bear in mind that if you decide to sell your home through an alternative route, such as Good Move, it’s likely you won’t have to pay a few of these charges.
The first fee to consider when deciding whether or not to sell your home and buy another, is any charges that may come with changing your mortgage. If you’re still in your initial mortgage term, you need to check whether or not your mortgage is portable or not. If it is, there may still be a small fee involved, but this shouldn’t be an excessive amount.
However, if your mortgage isn’t portable, you’ll essentially need to pay it back when you sell, and then begin a new one when you buy. Many mortgages will charge you a percentage fee for paying off your mortgage early – and if you have negative equity, this could end up being quite expensive.
Estate agent fees
If you’re selling with a traditional estate agent, they will usually charge you between 0.5% and 3% of your sale price.
When it comes to buying another house, there shouldn’t be any estate agent fees to pay.
Energy performance certificates (EPC)
This is mandatory when selling a house, so, unfortunately, you can’t avoid this cost. Before you put your home on the market, you need to obtain an EPC certificate, which looks into the energy efficiency of your home.
You need a credited assessor to do this for you, so you’re usually looking at a charge of around £75. You can usually obtain them through your estate agent, but you can also shop around online to look for a better deal.
You’ll need to have both the house you’re selling and the one you’re buying conveyed, and solicitors’ fees for this can be steep. Depending on whether or not your home is freehold or leasehold, and whether or not it has a mortgage, fees can range from around £600-£800.
However, these fees are cheaper when it comes to buying a new house and will either be charged as a fixes rate or as a percentage of the sale price. Again, other selling methods such as Good Move can often cover these costs for you.
Removal costs are unavoidable – unless you have your own mode of transport or a friend or family member who’s willing to help you move to a new house. Removals are often charged depending on the amount of rooms in your house, the amount of goods being transported, and the distance between the house you’re selling and the one you’re buying.
As an extremely rough estimate, you could be looking at a charge of anywhere between £100 and over £1000. Be sure to shop around online to get a good few quotes before choosing a removal company.
Don’t forget, you’ll often be charged more if you’re asking that they remove or pack items for you – do this yourself for a cheaper price.
Potential problems when buying and selling a house at the same time
Buying in a chain can present some tricky issues – when you buy and sell at the same time, you rely on someone buying your home in order for you to afford buying another house.
Here are some common issues that can be arise when buying and selling a house at the same time:
- Cold feet: The most common issue is people changing their mind. This can be extremely frustrating, but it’s a pretty common occurrence. When buying in a chain, you can’t buy your new home until the sale of your current one is in place.
- Mortgage issues: If you’re buying and selling at the same time, mortgage agreements can become complicated and they can often take longer than expected.
- Bidding: A huge number of buying and selling issues start with bidding. For example, the power of your own bid depending through sale dependency, onward chains after offers, or you are being outbid while someone has a bid on in your home.
- House chain delays or breakdown: Any delay from the bottom of the chain ripples all the way up – so be prepared for your completion date to be delayed as part of selling and buying your house at the same time. This can be frustrating, but it’s one of the main issues involved when relying on other transactions when moving to a new house.
- Survey findings: If a survey of any of the houses in the house chain – including the one you’re selling or buying – is discovered to have unforeseen yet serious and expensive issues, this can have a huge impact. It’s likely to cause large delays at the very least, or for that property to be taken off the market entirely, causing the chain to collapse.
Can you buy and sell your house at the same time?
Yes, it’s possible and completely common to buy and sell your house at the same time – but the process if often a little more complicated if you choose to use a traditional estate agent and join a house chain.
Is buying and selling your house at the same time more expensive?
On paper, buying and selling your house at the same time can be more expensive due to some on the unique fees that can crop up – but, it’s also important to factor in costs of temporary accommodation if you decide to sell first and then buy.
What happens to my mortgage if I buy and sell at the same time?
If you have a mortgage but want to buy a new home, this can often lead you to considering buying and selling a house at the same time – though it really depends on your mortgage terms whether or not this is the right choice. Sometimes mortgages are portable and can simply be transferred to a new home – but that is subject to checks and can always be declined.
If not, you might have to pay off your current mortgage early, then set up a new one for your new house – but this can sometimes result in an early repayment charge.
Do I have to use an estate agent for the process of selling and buying a house?
You’ll most often have to go with a traditional estate agent if you want to enter a house chain – but it is possible to bid on new homes while the sale of your home is pending to alternative buyers – such as Good Move. Plus, this can also help you avoid agent and solicitor fees, and lets you buy your home months faster.