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A logistical juggling act, a financial frenzy, and an emotional rollercoaster like no other in the world of real estate—this is the stigma around buying and selling at the same. One so strong that even the most seasoned homeowners are warded off from considering such a venture. It’s time to dismantle the negative misconceptions surrounding dual property transactions and, instead, embrace their rewarding nature.

Before we get into strategies to approach this process, let’s address some common doubts.

 

How do you buy and sell property at the same time?

 

We promise you that it is entirely possible to buy and sell property at the same time. The process is often referred to as a “simultaneous settlement” or “concurrent settlement”, and it involves coordinating the sale of your current property with the purchase of a new one, often within a relatively short timeframe.

A big part of it comes down to timing coordination; aligning the settlement dates of both transactions as closely as possible will facilitate a smooth transaction and ensure you aren’t faced with a need for alternative housing arrangements in between settlements. Be aware that in Queensland, either party can request a 5-business-day extension on settlement.

 

While dual transactions can be complex and require careful coordination, they are advantageous in that they allow you to transition directly from one property to another without the need for interim housing arrangements. Still sounding too daunting? Working with experienced real estate professionals can help streamline the process and ensure a successful outcome for you!

Do you need to sell property to buy property?

 

No! It’s not always necessary to sell property in order to buy a new one. If you have access to sufficient funding, such as a bank loan or cash, to afford a new property without selling your current one first, you can proceed with purchasing a new property without concern.

In certain situations, you may also qualify to make an offer on your next property, subject to the sale of your property. This will mean that your purchase of a new property is contingent upon the sale of your current one within a decided timeframe. This approach provides you with an option to back out if your current property doesn’t sell. In a competitive market, this type of offer is often seen as undesirable to sellers and can be hard to get across the line.

Is it financially feasible to handle the costs of purchasing a new property while simultaneously selling the current one?

 

Yes! In many cases, a simultaneous settlement is financially feasible. However, meticulous planning and careful risk management are required to safeguard the process.

Primary financial considerations include the deposit and settlement costs associated with securing your new property. Deposits typically range from around 2.5 percent to 10 percent of the purchase price, while settlement costs are typically valued at 2 percent to 5 percent. Settlement costs can include lender fees, lenders mortgage insurance, valuation fees, legal fees, and various other expenses. If you have equity in your current property, you may be able to use the proceeds from its sale to cover both the deposit and settlement costs. Speak to your mortgage broker or bank about gaining access to this equity early on if you plan to use it as funds for your deposit.

To determine the financial feasibility of handling these costs, it’s also essential to conduct a thorough assessment of your current financial situation, including your savings, income, existing debt obligations, and creditworthiness.

Will fluctuating property values impact the success of a simultaneous settlement?

Indeed, fluctuating property values can influence the success of a simultaneous closing. In a volatile market, you can never predict when conditions will chop and change. You may sell your home for a desirable price in the current market, but if an unfavourable fluctuation occurs before you secure your next property, you may be faced with inflated prices or limited options. This makes it all the more challenging to maintain your desired purchasing power.

To mitigate the impact of fluctuating property values, it’s essential to stay informed about market trends, employ the help of experienced real estate professionals, and maintain flexibility and adaptability in your approach.

How can bridging loans help me successfully buy and sell property at the same time?

 

By providing a short-term solution for individuals looking to buy and sell property simultaneously, bridging loans serve as a helpful financial tool. These loans allow borrowers to access funds to cover the deposit and settlement costs of a new property while awaiting the sale proceeds from their current property.

Leveraging a bridging loan prevents homeowners from having to make two mortgage payments simultaneously between closing dates.

Director and Finance Broker at The Finance Family, Tony van de Kerkhof, strongly encourages those who are looking to achieve a simultaneous closing to reach out to a trusted broker and secure a bridging loan. The Finance Family, for one, provides a service whereby individuals can secure a bridging loan without worrying about costs until settlement is finalised.

Tony explains, “If a person has totally paid off their property or has a small amount owing and wants to have the comfort of securing their next home through downsizing before selling their current one, there really is no better option. This type of bridging loan allows people to move out in their own time, declutter and do staging to get the best price possible! They also don’t have to make a single repayment through the process.”

Another bridging loan provider is Equity Flow, which can help you unlock up to $250,000 of your property’s equity for you to use. You can find out more about Equity Flow here.

The only catch is that once settlement has occurred, the “bank clock” begins ticking, and borrowers usually have 12 months to sell and settle their loan, which will pay off the amount borrowed and any interest accrued.

Should I worry about stamp duty when buying and selling at the same time?

 

This depends on your specific circumstances.

When buying and selling property simultaneously, the concern about stamp duty largely depends on factors such as your property’s value, location, and any applicable exemptions or concessions you may have as a homeowner. Typically, when purchasing a property, you’ll need to factor in stamp duty costs, which vary based on factors like the purchase price and property type.

However, when selling a property, you generally don’t have to worry about stamp duty, although other taxes like capital gains tax may apply in certain situations.

While stamp duty is an important consideration, it’s just one aspect of the overall financial picture when navigating simultaneous property transactions.

Should I have the same solicitor acting for the sale of my current home and the purchase of my next home?

 

Ultimately, this decision is weighed upon whether your solicitor has the expertise and capacity to handle both transactions effectively, as each may involve different legal considerations and challenges. Additionally, some individuals prefer to have separate solicitors for each transaction to avoid conflicts of interest.

However, according to Qualified Property Investment Adviser and Brisbane-based buyer’s agent Lauren Jones, having the same solicitor for both transactions is a necessity. Ms Jones believes this strategy will streamline communication and coordination between the two transactions, potentially making the process more efficient. She also stands behind the belief that it will ensure a greater legal protection of your interests as a homebuyer.

Andrew Pine, director and solicitor of Welcome Home Conveyancing agrees with Ms Jones’ comments, noting that the solicitor who is acting for both the sale and the purchase must ensure that your rights are protected throughout each transaction. As each contract stands on its own, it is important that you are not inadvertently in breach of one deal because of an event that occurs on the other which is outside of your control.

For example, if the seller for your purchase has a right to extend the settlement date, it is important that you have this same right for your sale – otherwise you could be in breach of your sale contract, which would lead to significant financial and legal repercussions.

A dose of expert advice on the simultaneous settlement process

 

As the owner of Brisbane-based Lauren Jones Buyers Agency, which specialises in helping individuals who are buying and selling at the same time, Ms Jones is no stranger to the common misconception that it is a “dreadful process that’s all too hard to handle”. However, with years of experience up her sleeve, Ms Jones also understands the many routes this process can follow. From her easiest-known approach to “certain doom”, Ms Jones shares the four ways simultaneous closings can go down.

The Easy Way

 

The first approach presents the most straightforward option for the buyer. It involves purchasing the property with a 30-day settlement period followed by a 3-6 month rent-back arrangement. Upon settlement, the buyer gains ownership of the property and receives the proceeds, while also renting the property back from the seller for the agreed-upon period. This method circumvents the need for a contingent purchase and alleviates the pressure to swiftly secure a contract on the newly acquired property.

Next Best Thing

 

Another relatively straightforward approach Ms Jones suggests for sellers involves initiating their property search while concurrently conducting an off-market campaign. Opting for a longer settlement period of 90-100 days allows sellers to begin their search while their property remains on the market. However, this approach entails the challenge of entering into a contract subject to the sale of their current property, a process that can present difficulties in terms of securing a purchase.

Can’t Hurt, Right?

 

Another favourable option involves selling the home unconditionally with a longer settlement period of 90-120 days, followed by purchasing a new property without any ‘subject to sale’ conditions tied to the sale. This approach allows for a simultaneous settlement, streamlining the transition between selling and buying properties.

One negative effect of this approach is that it can put time pressure on homebuyers to rush their property purchase. It’s important to have a plan B in mind when it draws close to your last 30 days to go under contract. This could involve planning to move possessions into storage whilst living in an Airbnb or staying with loved ones temporarily.

Andrew Pine again provides intel that, in this market, there is an increased number of buyers choosing this option, given that sellers are choosing to accept “cleaner” unconditional contracts, rather than contracts which are subject to the buyer’s sale being completed. That being said, if you can structure your purchase offer as being subject to the successful settlement of the sale of your property, along with a short settlement extension right (if the buyer for your sale has this same right), you can be adequately protected under both your sale contract and your purchase contract – enabling both transactions to settle on the same day.

Certain Doom

 

Lastly, there comes the least favourable option. This one involves selling the home with a too-short settlement period which potentially leaves the seller without suitable accommodation to temporary occupy. It can also necessitate a rushed purchase of an unsuitable property that may not meet their needs.

And there you have it—a break-down of exactly how to avoid unsuccessfully buying and selling at the same time. This seemingly impossible venture isn’t so daunting now, is it? With careful planning and the right support, buying and selling property at the same time is entirely manageable.

However, if you’re still finding the process overwhelming, consider enlisting the expertise of a buyer’s agent like Lauren Jones. Their guidance and unparalleled market knowledge can make all the difference in navigating this exciting chapter of homeownership.

So don’t let fear or stigma hold you back—go embrace the rewarding journey of buying and selling at the same time! Start your search on Homely and get ready to find your dream home.