Auction Day is a nerve-wracking experience!
I remember the excitement hubby and I felt when we purchased our first home together. It was a cute single-fronted terrace house in inner city Melbourne. We thought we were the coolest kids in town living so close to the MCG (well, that was Mr NASD’s joy), the CBD and we had about a dozen bars and pubs all within a stone’s throw from our house. It was ace.
Our “garden” was a tiny paved courtyard but who needs grass when you don’t have kids and your frequenting beer gardens on Sundays? The house was lovely and suited us perfectly. The suburb was gritty in some parts, noisy and full of colour and life. We loved it. That is until we became parents. And then our needs somewhat changed.
In the early parenting days, it was fine. We held onto some parts of our former lives (you could still get the pram into most pubs) and the baby seemed to rather enjoy the rhythmic sounds of the trains which went through our house (trust me, the Diesel trains shook the house) every 90 seconds. Lucky she was a good sleeper! But when we fell pregnant with our second child we knew it was time to find a more “practical” house. One with a true yard and ample storage (because kids accumulate so much stuff) and in a “family friendly” area (read: suburbia).
So we traded in our inner city pad for a family home complete with a white picket fence and surrounded by plenty of pubs, er, I mean parks, PARKS!
We decided to buy first and then sell later. We felt we had a good idea of what our house was worth and so we worked out what we could afford based on worst case selling scenario and we went to our max when we bought a lovely 4-bedroom house with loads of space.
Only things didn’t go to plan. Property prices were going through the roof and we paid a lot more for our new home than we had intended. As luck would have it, the week we bought our house the market dramatically turned and suddenly houses in our area were dropping in value. You don’t think things can change that quickly but we learnt, they can!
Auction day came for our inner city gem and we didn’t have a single bidder. Not one. In fact, the “crowd” comprised of family members (my very own rent-a-crowd) and nosy neighbours. No one wanted to buy our home. We began to worry. A few weeks later an investor came through, gave it a cursory look and offered a figure less than desirable. We had no choice but to accept it. We vowed then if we ever to move again we would sell first and buy later.
Which is exactly what we did six months ago. Our picket-fenced house served us well and welcomed two new babies into the fold, but after five years we outgrew it. We didn’t even consider buying first this time around as the stress of not being able to sell last time was still fresh in our minds.
Fortunately, Auction Day this time was a totally different affair. We had multiple bidders on the day, and we reached our reserve. Within an hour of selling our house, we went to another auction to bid. We knew exactly the figure we had to spend and we went to our highest bid. Unfortunately, someone else went higher and we returned home without the neat and tidy dream of selling and buying in the one day.
And……”SOLD”! Phew!
Our settlement was 90 days and we had hoped to find somewhere to buy within that time but it didn’t happen. We are now renting and still looking for somewhere to own. I’ve spent a very large part of my life on real estate sites hoping for “the one” to appear and present within our budget. One such site is Homesales. With thousands of properties for sale on the site, I have found it very helpful for my search.
Overall I am happy with the decision to sell first, but I can see that this approach comes with pros and cons.
Advantages
- It puts you in a stronger position when buying. The seller would almost certainly prefer a buyer who has the cash in the bank rather than enter a chain, where the sale is dependent upon you finding someone to buy your house.
- You remain in control of the sale of your own house – because you won’t need to make a quick sale, you will not be pressured into selling under your reserve.
- Settlement flexibility. You may get a better price if you find a seller who is keen to move quickly
- You will know exactly how much you can spend because you’ll have the money from your sale in the bank. Buying your new home won’t be dependent on you achieving the expected price on your existing one. If prices are falling, then houses get more affordable as you wait.
Disadvantages
- If you sell first, with the expectation you will be able to buy quickly after, you may be disappointed and instead have to rent for a time, which can prove very costly.
- It can be risky not to buy and sell in the same market. If prices are rising fast, by the time you’ve sold your house and sorted out somewhere to rent, a new house will be much less affordable.
- Renting can be stressful, and feel transient, but not being able to sell, or feeling you’ve undersold can be worse.
The hunt for our perfect home continues. Luckily we found a lovely rental and we are happy where we are, for now. I have a very clear idea of what I want. Now I just have to find it….
Have you bought or sold a house? In which order did you do it? Share your experiences below in the comments.
*NASD partnered with Homesales on this post.
