Should I Buy or Sell First - Real Estate Tips

LEN WORTHINGTON’S REAL ESTATE TIPS

should i buy or sell first?

The prospect of selling your home before you have established where you are going to move to may seem daunting at first. This book explains the major factors you should consider when deciding whether to buy or sell your home first.

“Profit from my knowledge!”

Dear Valued Client, The prospect of selling your home before you have established where you are going to move to may seem daunting at first. But the truth is a huge number of home hunters find the property they want within a relatively short time. So don’t be afraid to sell first – then buy. This means you will have your financial arrangements already taken care of and you have the freedom make an offer knowing you are in a strong position to negotiate on price and time. This is definitely the best strategy to optimise your selling price and buying power (see pages 6-7).

Alternatively (although not recommended) there are two major financial disadvantages to consider if you do decide to buy before selling (see pages 3 -5).

1. If you make an offer on a property before your house is even on the market, the seller of the property you want is less likely to be willing to negotiate on the price or the terms.

2. Selling your house as a condition of contract to buy another usually means you have very limited time in which to complete a sale for your existing property. This means you can be under pressure to accept offers.

Regards,

Len Worthington

Mobile: 0402 297 355 Email: lenworthington@remax.com.au

PS - You can contact me with any questions at any time! www.facebook.com/lenworthingtonrealestate Page One - Should I Buy or Sell First?

Contents Buying First - Subject To Sale 3 Buying First - “Sunset Clause�

4 Buying First - A Common Scenario 5 Selling First - This Best Strategy Explained 6 Selling First - Strategies 7 Coming Soon Campaigns & Moving Forwards 8

Disclaimer The information in this newsletter is for general information purposes only. Every care has been taken to minimize any errors. It is not intended as financial or investment advice and should not be construed or relied on as such. Before making any commitment of a financial nature you should seek advice from a qualified and registered financial or investment adviser and / or independent expert opinions. No material contained within this newsletter should be construed or relied upon as providing recommendations in relation to any financial product.

The information provided is current as at the publication date only. This publication is supplied on the basis that while Len Worthington Property attempts to ensure the information in it is reliable at the publication date, it does not warrant its accuracy or completeness and to the full extent allowed by law excludes liability in contract, tort or otherwise, for any loss or damage sustained by yourself, or by any other person or body corporate arising from or in connection with the supply or use of the whole or any part of the information in this publication through any cause whatsoever. I disclaim all responsibility and all liability (including without limitation, liability in negligence) for all expenses, losses and damages (including indirect or consequential damage) and costs which might be incurred as a result of the information or data being inaccurate or incomplete in any way and for any reason.

If you see any inaccuracies in this publication please email me at:

lenworthington@remax.com.au

Page Two - Should I Buy or Sell First?

Should I Buy or Sell First?

Buying and selling at the same time can bring added stress to your move. Deciding whether to buy or sell first can be a difficult decision..

Buying First – “Subject to Sale”

Your offer is accepted with a contract condition stating that the offer on the property you are buying becomes unconditional when: • Your current property sells i.e. you sign a contract for the sale of it and then that contract becomes “unconditional”; or • You elect to confirm in writing to the seller of the home you wish to purchase that the “Subject to Sale” condition has been waived or satisfied.

The Upside You have secured a property and you know where you will be moving to when your home is sold.

The Downside • You are not in a strong negotiating position when you make an offer with a “Subject to Sale” condition, therefore you will often need to pay more to “lay-buy” your new home than you otherwise would had your offer not been “Subject to Sale”.

• You need to commit to a building & pest inspection and solicitors expenses before your existing home has sold, so even if your existing property does not go under contract, you could have outlaid costs of up to $1,500.

• You will be under pressure to get your home sold quickly. The focus will be on the speed of selling, rather than on getting the best price.

• Often people have sold their current home for far less than is usual, just to hold onto the new property they have just purchased. You become emotionally invested in and attached to the new home that may not end up being yours. This can cause stress and lose you money on the sale of your current home.

If you buy before you sell, the seller of the home you wish to purchase will almost definitely add a “Subject To Sale” Condition to the contract.

An example of the “Subject to Sale” Condition is: “ This Contract is subject to and conditional upon the Buyers entering into a Contract for the sale of their property situated at 1234 Bloggs Street, Albany Creek on or before 30 days from Contract Date, with such Contract becoming unconditional as to finance, building and pest inspections, and any other Special Conditions that may be relevant on or before 45 days from Contract Date, and is further subject to the completion of such sale on or before 75 days from Contract Date. If the Buyers are unable to meet the aforesaid requirements within the time limits stated, either party hereto may terminate this Contract whereupon all money paid as deposit shall be refunded in full to the Buyers.”

Page Three - Should I Buy or Sell First?

Should I Buy or Sell First?

Buying and selling at the same time can bring added stress to your move. Deciding whether to buy or sell first can be a difficult decision..

Buying First – A Common Scenario Congratulations - you’ve found your new dream home - but it’s NOT definitely yours yet!

As discussed on the previous page, chances are you will have pay a premium price to secure the property you want to buy in order to entice the seller to accept your offer subject to the sale of your existing property.

Your purchase contract will no doubt be conditional on a “Subject To Sale” condition. The seller of the property you want to buy is also unlikely to want to “lock” himself into taking his home “off the market” for you, whilst waiting for you to hopefully sign a contract to sell your existing property within the time periods stipulated. He is therefore most likely to also place an escape clause (or a “Sunset Clause”) into the contract.

What is a “Sunset Clause”?

“A Sunset Clause” means that until you sign a contract to sell your existing property, the owner of the property that you’re trying to buy can continue trying to sell his home to another buyer, and they can take a more favourable offer from that second buyer and cancel your contract, unless you “waive” your “Subject To Sale” condition within 3 business days from when the second buyer signs their contract.

An example of a “Sunset Clause” is: “ It is agreed by the parties hereto that the Sellers may continue to list and market the property herein for sale. If the Sellers receives the offer of another Contract prior to the Buyers entering into a Contract of Sale for their property, the Sellers may give the Buyers notice in writing requiring the Buyers to waive the benefit of Special Condition One (The Subject To Sale Condition) within three (3) working days from the date of such notice. If the Buyers do not waive the benefit of Special Condition One by notice in writing to the Sellers within the time stipulated, the Seller may terminate this Contract whereupon all money paid as deposit shall be refunded in full to the Buyers.”

Page Four - Should I Buy or Sell First?

Should I Buy or Sell First?

Buying and selling at the same time can bring added stress to your move. Deciding whether to buy or sell first can be a difficult decision..

Buying First – A Common Scenario Congratulations! You have now signed and entered into a contract - most likely with a “Subject To Sale Condition” and a “Sunset Clause”.

The next step is to put your house on the market.

If you’re not fully prepared and ready for this step, you may spend around 2 weeks getting your existing property “market ready” to ensure that you get a good price. This provides time for the completion of the photography and advertising to get your existing home “on the market”, and ready for your first buyer inspections.

During this initial 2 weeks of the contract on your new home, you will most likely need to complete a building and pest inspection and have your finance approved (conditional upon the sale of your existing property).

In the meantime the great property that you have discovered and are emotionally invested in, and you’re now trying to buy, is drawing plenty of interest from other buyers in the market place. There is the strong potential of another offer coming in from one of these buyers exercising the “Sunset Clause” in that contract.

If that does occur, your options might include: 1. Going “unconditional” on your dream home (ie. Waiving your “Subject To Sale” condition as required within the “Sunset Clause”) in the hope that your existing home then sells quickly.

BUT BEWARE! You may end up owning two homes and utilising “bridging finance”.

2. You may be concurrently negotiating an offer on your home at that exact moment. You might decide to accept this offer quite urgently, even though it may potentially be lower than market value, in order to secure your dream home. So there is the potential you pay a slightly higher price for your next home while accepting a slightly lower one for your current property.

3. You give up on your dream home and continue marketing your existing property in the hope of finding another new home.

4. You withdraw your existing property from the market and go through a similar set of circumstances again the next time you discover your dream property. Only this time you have already withdrawn from sale once and will be unlikely to want to do it a second time. So you may end up choosing options 1 or 2.

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Should I Buy or Sell First?

Buying and selling at the same time can bring added stress to your move. Deciding whether to buy or sell first can be a difficult decision..

Therefore.. Selling First IS the Best Option!

For Allowing you to Avoid a Costly Mistake

The Upside • You know exactly how much money you have from the sale of your home and therefore how much you can spend on your new home.

• You are not under any pressure to sell your existing property quickly, allowing you to focus on finding the perfect buyer and achieving the best price.

• You are not under any pressure to take any offer - especially the low one’s!

• You can negotiate for a longer settlement (perhaps 60-90 days) to give yourself more time to find your next home.

• With your property now under contract, you are in the best position to negotiate a great price on the purchase of your new home - which could potentially save you tens of thousands of dollars.

The Downside • Not knowing exactly where you will live next can be stressful. To ease the nerves a little, I can provide you with a “Destination Market Analysis” for the suburb you are looking to purchase in, which details market trends, general suburb information and recent sales and properties currently on the market. I can also provide advice or assistance when you are ready to negotiate a purchase.

• If you have not found a property before the settlement date, you may have to look at one of the short term options (ie. A short rental lease or short term accommodation, such as www.rent-a-home. com.au )

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Selling First: Strategies STRATEGY 1 (Recommended) Sell first on a long settlement.

Secure the best possible price for your own property, with a longer contract settlement period (perhaps 60-90 days), and then aggressively enter the market to buy your next home. Worse case is that you may have to seek temporary accommodation, or a short term rental property, if your existing home settles before you can move into your new home.

At least you won’t be left with owning two homes (and two mortgages) or many sleepless nights on “bridging finance”.

OR STRATEGY 2 Appoint Len to “pre-package” your property’s marketing campaign.

Following this process may save you several weeks of rushed preparation time when you find your ideal next home, and perhaps save you from losing out altogether on that next dream home.

With this strategy you begin preparing your house for sale. Once you engage me as your agent you allow me to: • Prepare the listing documents, write the marketing ads, complete the photography and sort suitable buyers from his database to activate the minute you are ready!

• Run a “Coming Soon Campaign” (see details on next page) targeting existing buyers and telling new buyers entering the market of a home that may be suitable for them (only for when you are ready for buyer inspections).

• You continue to look for your next home, knowing that when you do find the right one, you’re ready to negotiate. You are already 2-4 weeks ahead of where you would have been had you waited until the last minute after you had found your next home.

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What’s Great about a “Coming Soon Campaign”?

• Your home isn’t “actively” marketed until you are ready. If we do secure an early buyer during the “Coming Soon Campaign” and before your home is open to the full market, it allows us to negotiate a stronger outcome. It is likely that the buyer will not want to miss out to other buyers once the actual marketing for your home commences.

• You can simply “test the waters” first, and you don’t have to accept an early offer if you haven’t found your next home. If an early buyer offer does come however, at least it will give you a true idea of your home’s value and give you confidence as to the probable buyer response and interest that will be shown in your home when it does come onto the market. You also don’t need to fear that your property has been over exposed, sitting on the internet week after week affecting buyer’s perceptions of the property, because it hasn’t even appeared on the market or internet yet.

It’s not often that you get two opportunities to make a first impression!

• Meanwhile, as you’re “testing the waters”, you may go out into the market and find that perfect next home. When you do make an offer on your next home, simply phone me to push the ‘ACTIVATE’ button. The next morning your property goes live on the internet and the marketing commences. You are already 2-4 weeks ahead of where you would have been had you waited until you had found the next home before engaging me to sell yours.

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Things to Prepare: Your ‘Go Forward Plan’ Don’t be surprised if one of the first homes you inspect is “the one”. It drew your attention & interest for a reason.

1. Book an appointment with Len to appraise your house even if you have had a recent assessment of value from another real estate agent. This will ensure your price expectations are in line with the market. You wouldn’t want to discover you have been searching for a home in a price bracket above or below what you can afford.

2. Speak to a financial advisor to discuss a deposit for your next property as well as the ins and outs of bridging finance short term should you require it.

3. Consult with Len regarding preparing your property for sale to ensure you maximise your home’s value through great preparation and presentation.

4. Obtain a Market Report from Len on your desired location or suburb. This will detail the last 6 months of sales and market trends. This will ensure you are well informed for when that dream home comes up, assisting you in buying right.

5. Obtain Lens Guide: ‘TIPS TO PREPARING YOUR HOME FOR SALE”

PREPARING YOUR HOME FOR SALE

BUYING YOUR NEW HOME LOCALLY

This guide will share the little things that help attract buyers to your home, assisting you to sell faster and at a better price. Your aim should be to ‘present’ your home in such a way that it looks its absolute best.

Purchasing residential real estate can be a very exciting process; however it can also be a confusing time for prospective buyers.

As you may already be aware, different agencies usually have different sets of rules and standards.

Consider the best features of your home and most importantly put yourself in the buyer’s shoes.

If you notice any objection -able features then you can be sure that the buyer will too.

Remember the 4 R’s

“Repair, Revamp & Reap the Rewards”

This guide will step you smoothly through the process of buying a home.

Practical information on finance, understanding the market, finding a property, what to look for in a home, as well as making an offer, offer acceptance and the process from contract to settlement.

PREPARING YOUR HOME FOR PHOTOGRAPHY

SUCCESSFULLY SELLING YOUR HOME

Selling your property is all about presentation and buyer perception. When pictures say a thousand words you want them all to speak positively. Well presented suggests well maintained.

For most Australians, buying and selling their home will be one of the biggest financial transactions they undertake.

This checklist will provide some assistance for you in preparing your property for great photos, and helping to make the marketing as good as it can possibly be to attract plenty of good buyer interest!

This guide will show you, step by step, the process of successfully selling your greatest asset. This is one of the biggest decisions you will make and can be an emotional time.

The difference in ‘getting it right’ or ‘getting it wrong’ could be the difference in tens of thousands of tax-free dollars or being on the market for months longer than you have to be!