Selling your home and buying another are two of the most stressful life events. Timing it to avoid an inconvenient and expensive gap is the holy grail. So how can you give yourself the best chance of getting it right?
For most, buying a house before selling your own is not a runner. For those who can’t, they must sell first and then buy. Though it’s a more financially secure option, and you’ll know exactly how much you have to spend, it is not without potential pitfalls.
A short-term rental, if you can find one, is expensive. Pitching up at the in-laws to share the bathroom, fridge and remote control can test even the most cordial relations. Add in your life’s possessions, a clatter of children and the family pet and you’ve got the perfect storm. To avoid a gap between homes, or to at least keep it short, it’s all about preparation.
If I wanted to sell my house in the morning, why wait until the buyer's surveyor finds issue with the property?
“First off, identify the reasons why you are moving,” says Graham Murray, regional director at Sherry Fitzgerald. Whether it’s a fourth bedroom, a larger garden, a quieter road or proximity to schools, be sure such a house exists before listing your own. A long search for the unattainable makes dovetailing unlikely. It lengthens the gap between homes, costing time and money.
Once you are sure properties like your dream home exist, it’s time to get ready to sell. “The best thing you can do in the background is make sure your legals are done and resolved,” says Murray.
If you have a mortgage, then the deeds to your house will be with your bank. It can take weeks for them to arrive with your solicitor. Until they are retrieved, your solicitor won’t know for certain what further documents are needed. It’s one of the areas where delays can occur.
“Request the title from your bank and make sure it is sitting with your solicitor so that when you have identified a buyer for your home, you can issue a contract within 24 to 48 hours.” Getting contracts signed fast means your buyer has less chance of having their head turned and you can move on.
Being one step ahead of your buyer is another good tip. Maybe it’s a damp patch in the bedroom or your less-than-handy uncle converted the attic, but there isn’t much that will escape your buyer’s surveyor. Rather than have your “sale agreed” go sour, enlist your own surveyor at the outset.
“If I was a vendor and I wanted to sell my house in the morning, why wait until the buyer’s surveyor finds issue with the property?” says Edward McCauley, head of policy at the Society of Chartered Surveyors Ireland. To be forewarned is to be forearmed.
“I’d spend the €400 or whatever is required to get a condition survey. It’s like a pre-NCT,” says McCauley. A surveyor will help you to identify issues and address them before you go to market. It avoids the possible stigma, not to mention the delay, of your one-time “sale agreed” being re-listed “for sale”. And if you don’t have the funds to rectify issues, a report of your own can arm you for haggling with a discount-seeking buyer.
Most banks insist on subsidence cover to advance the mortgage
If you are “sold” or near it, and ready to pounce on your next pad, then there’s a few more things you can do to mind the gap between homes. Unless you are a cash buyer, you’ll need a mortgage – but mortgage approval is just base camp. Some tripwires, such as the specifics of your home insurance, remain.
“The banks don’t look for some conditions to be satisfied until just before draw-down,” says Joey Sheahan of mymortgages.ie. “Most banks would insist that subsidence cover is included in the policy or they will not advance the mortgage at all. If you’ve left that to the last minute and it’s in a subsidence-risk area and you can’t obtain subsidence cover, then your mortgage could be jeopardised.”
This can apply to flood cover, too. Sheahan advises getting an online insurance quote for your chosen house to test for red flags.
Mortgage protection is another area where risky delays can occur. “We would always apply for that on behalf of the client at the same time as we are sending the mortgage application, because if there is a delay, or you are unable to attain cover, then the bank will not advance the mortgage.”
Depending on the health issues disclosed, it could mean a visit to a GP or consultant to sign off on forms. If your doctor is on holidays or there is a waiting list for a consultant, the resulting delays can spook a vendor.
Making the right impression on the seller’s estate agent is all-important.
“If we are selling somebody’s property for them, we will always be looking for the buyer who is in the best possible position to perform for them,” says Murray. “You are going to be competing with people who have already sold their home and they are renting, or they are mortgage-approved, or they are cash buyers. All you can do is push forward with your own sale as quickly as you can.”
In the beauty pageant of potential purchasers, you want to present yourself as the most comely. “Be very straight: ‘I have all of this organised, I have accepted an offer on my house, that is where I am at,’” says Murray. Honesty is the best policy. Fibs will be found out.
If an applicant has sufficient savings or a gift from family, then we can often get mortgage approval on the basis that they are not going to sell their house but rent it out
Is there any merit in pitching an offer, pending the sale of your own home? "You could have someone offering x amount more but it is subject to the sale of their own house – then a client has a decision to make. But our advice is always [to accept] the highest unconditional offer."
Mortgages enabling you to buy your next home while retaining your own do exist. “If an applicant has sufficient savings or a gift from family, then we can often get approval on the basis that they are not going to sell their house but rent it out,” says Joey Sheahan.
“They might rent it out for a period of time or decide soon after they will sell it, but they are not bound to sell it to coincide with the purchase. That takes a lot of pressure off.”
One thing is for sure: a “sale agreed” sign doesn’t make it a sure thing. Murray estimates that about 20 per cent of homes that have gone sale agreed fall through. And it’s not always about the buyer or seller having a change of heart. “Surveys can throw up unexpected costs, so a deal may not go ahead, or something can come up in the title search to throw a deal awry,” he says.
Joey Sheahan agrees with the one-in-five figure. “It’s usually down to legal and structural issues that may affect a borrower’s ability to get a mortgage,” he says.
Failure to get subsidence cover is a case in point. “If the house needs to be underpinned, they may not have budgeted for that.” Banks will cover the cost of a fixer-upper once the amount being spent is increasing the property’s value by at least that amount.
Above all, be flexible. While dovetailing the sale of your old home with buying a new one would be nice, it’s not the endgame. If you end up falling for a property that needs work, you might have found your dream home, but your plan for a seamless move is out the window.
