SHOULD YOU BUY OR SELL FIRST? THE MOVING HOME DILEMMA…

There are many considerations to contemplate when it comes time to upgrade or downgrade to a new home. While usually exciting, it can be very stressful at the same time.
With our current busy lifestyle, there is already so much to do without the added pressure of dealing with several real estate agents and coordinating a move.
Your buying/selling strategy will largely be influenced by your financial (and sometimes personal) situation, the housing market and interest rates.

Regardless:

you’ll want the best possible price for your current home, and
a great deal on your new one.

The gap in between buying and selling can make a huge difference depending on the property cycle, type of property you are considering swapping to, the state (regional or metropolitan) and the current market conditions in the suburbs you are selling in and
buying into.

SHOULD YOU BUY FIRST?

In a strong market, buying first feels less of a risk as properties are likely to sell well and sell quickly. You will want to buy quickly before the market rises too fast and the price gap between your new and old property becomes too great.
In a declining market, the race is on to achieve the best price possible for your home while there are still buyers in the market and before there is little or no interest left in your property. Then there is timing your purchase and settlement where you do not over pay before the market has bottomed out.

For those who are prepared to buy first, you will need to:

• take a risk that your existing property will sell within your desired time frame and at the price you need for the next one,
• have a strong financial standing to cater for an extended misalignment in settlement dates,
• consider holding the current property and renting it out in the event you can’t sell or want to wait for a better time to sell
• be prepared to take on bridging or other finance options should you need it to cover the cost of the new purchase until such time as the existing property is sold.

Be careful

There are many considerations when using bridging and other finance options:

How will you accurately predict how much your existing property will sell for?
Do you have an additional 20% deposit or enough equity and serviceability to cover the gap time (bridging loans aren’t covered by lenders’ mortgage insurance (LMI))?
If you don’t already own your home, you will be paying interest on both properties and the longer the sale takes, the more interest you will pay. Sometimes it doesn’t pay to hold out for a better sale price as the holding costs may outweigh the additional sale price.
You will have additional advertising and property holding costs like council and water rates.

There are a few options for financing properties in between the sale and settlement match up dates.

Don’t worry, we can step you through the details!

Ask us for our topic sheet on these What is bridging finance and what are other alternate
finance options when you are caught in between buying and selling?

SHOULD YOU SELL FIRST?

In a downturn or softer market, it can take longer for a property to sell. On the upside it is also less expensive to buy.

‘Where there are pros, there are most certainly cons!’

Selling first reduces your risk and gives you certainty of exactly how much you can spend on your next home. But of course time is not on your side.

Ideally you will want to align your settlement date of your existing property with the settlement date of your new property so you can move in on the day you move out. But that’s an ideal world! It does and can happen with good agents and finance options
available to you.

Mounting pressure to buy within that settlement period may lead you to make hasty decisions and perhaps not purchase your next home of choice.

If you are considering selling first, there are a few options to think about if you’re left without a new home.

Renting. Really?

Renting after the sale of your property can give you time to make thorough, considered buying decisions.
If you are moving to a new area this could be a great advantage allowing you to try before you buy. (But keep those packing boxes handy – you’ll be moving twice!)

Move in with family

Not everyone has or wants to consider this option.

And we get that!

However, if it is an option for you, while you are house hunting there will be potential savings typically enjoyed in a shared living environment (like mum cooking and doing your washing for you…), and of course NO RENT.
But can you all still live together?! Can you put a cost on that?

Request an extended settlement

When purchasing a home, the settlement process is the last hurdle before you can finally own your dream home and take possession of the property.

Buyers and sellers often negotiate property settlement dates. The people selling their home may also need time to look for another one.

A mutually agreed extended settlement period can give you both additional time to buy the right home. You may be lucky enough to coincide it with the settlement on your new purchase – and only move once!
Remember though – once a contract is signed, the settlement date is fixed – you are committed. The vendors are not required to change the agreed settlement date and there can be severe delayed settlement costs if you cannot settle on time.

In regards to auctions, as the successful bidder, you agree to settle on the date indicated in the contract, so make sure the settlement date in the contract works for you or ask for it to be changed before auction day!

Getting it right

As mentioned, when it comes to changing homes, timing is everything. Juggling both selling and buying at the same time is challenging but possible with the right team by your side.

Obtaining specialist advice is key.

From us, your finance specialist, your local real estate agents or advocates, solicitors or conveyancers. We have contacts across these industries to help you make the right decisions.

Please reach out to see how we can help with your new home transition and give us a call on (03)8657 8664.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. ©2020

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4 Tips For Finding That Perfect High Yield Property

By Kola Dev • March 19, 2025

Any property guru worth their salt will tell you that a dream property investment has nothing to do with a prestigious address or sleek amenities. The ultimate goal, is to find that perfect “high yield” property that will give you maximum returns for as little input as possible. Yield refers to the amount of cash a property produces as a percentage of its value and is calculated by the rental income you are receiving compared to the purchase price. There’s a lot more that goes into the calculations, which I’m happy to run you through, but to give you an idea on what to look for, I’ve put together some simple tips. 1. Do your research. There are plenty of stats out there that will give you the median rental yield for each suburb. This is a great place to start! 2. Look for dual income properties such as a house with a granny flat. You can potentially have two streams of rent coming in, meaning the chance for a higher rental yield significantly increases. 3. Have you thought about looking rurally? Country towns offer some great properties at a low price and because the cost of living is low, the rental yields tend to be higher. 4. Always think forward. Be on the lookout for up-and-coming areas and ask yourself if they’ll still be flourishing in five years time. At the end of the day, you need to be realistic. Just because a property has a high yield doesn’t mean it’s going to be a great investment. As a mortgage broker, I can talk you through your options for investment loans so you can see what your monthly outgoings might look like. Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

7 Quick Ways to Upgrade Your Home

By Kola Dev • March 19, 2025

The continuing boom in property prices has tempted many homeowners to invest in renovations to maximise the value and then put their home straight on to the market. There’s no doubt you stand a better chance of enjoying a great return on your investment if you modernise your home. Properties that enjoy a mix of the traditional and the contemporary are in big demand among today’s buyers and nothing ticks the boxes more than a brand new kitchen or bathroom. Two increasingly popular features at the moment are a dedicated home office and a design that connects the indoors with a garden or entertaining area. But renovation projects of this size can become expensive. If your budget doesn’t allow for large-scale upgrades, there are plenty of ways to enhance the value of your home at little cost. Here’s a seven-point guide to upgrade your home. 1. Break out the brushes It’s amazing how a fresh coat of paint will improve a property. Don’t focus only on the walls but attend to the skirting boards, ceilings and architraves. Select neutral colours as these make rooms feel bigger. 2. Go green Small-scale improvements to your gardens work wonders. Focus on the front yard as this creates an all-important first impression. 3. That’s entertainment If your property lacks an area to entertain, this is a great low-cost project to enhance your property’s desirability. Consider adding a deck or a barbeque area. 4. Floor ’em A mixture of different floor types can make a home feel bitsy while a home with consistent flooring creates a great sense of flow. Replacing the floor can be a painful project but you’ll be amazed how much bigger your home feels. 5. Say it with storage You can never have too much storage. A bedroom without built-in robes is just asking for clothes on the floor. Think about storage in bedrooms, bathrooms, kitchen and laundry and looks at ways to create clever storage solutions in nooks and under the stairs. 6. Kitchen upgrades If yours is a little tired, don’t worry – you don’t have to rip it out and spend big dollars. Consider replacing only the doors, drawers and handles. You’ll achieve a transformation at the lowest possible cost and it will feel like new. 7. Unbeatable bathroom Like the kitchen, this can be an expensive renovation. You can avoid replacing tiles by using a professional company to spray-paint them. This treatment can also be applied to sinks, baths and showers. New tapware and shower screens complete the refresh for a fraction of the cost of ripping and replacing. Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment. *This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.

7 Tips for Organising Your Finances Before You Buy A Home

By Kola Dev • March 13, 2025

There are many tips for buying a property, but there’s one essential element that no one can avoid - getting your finances in great shape before you start. Knowing what you can afford is a critical element of finding your first home or the next one that takes you higher up the property ladder. The most successful buyers begin their search with their finances in order and a pre-approval letter from their bank or lender. They know their budget and tailor their efforts accordingly. There’s no greater waste of time than visiting properties that are beyond your price range. Using a mortgage broker can help you shortcut the hours of research through various banking products and good brokers have detailed market knowledge and can offer an array of products. We can suggest the loans most suitable to your circumstances and assist you with paperwork, and review your credit history. We can also help you understand any grants or tax exemptions from state and federal governments that you may be eligible for. Below are a few tips for securing the finance that will help you find your dream home. 1. Clarify your finances If you’re a homeowner, you’ll need to obtain a valuation on your current property and provide proof of current earnings. A first-time buyer will ideally have 10% of the purchase price as a deposit to get the best interest rate and conditions for their first loan but the more the better. Money for legal fees, property inspections and taxes need to be set aside, too. Make sure your tax returns are up to date to prove your earnings. It will make life easier. 2. Low barrier to entry You can obtain a conventional loan with as little as 5% of its total as your deposit. Some government-backed loans do not require a deposit. 3. It pays to save The more you save, the less you borrow. And that means lower your monthly repayments for you over the term of the loan. 4. Go for a grant First-home buyers should research the current grants from various levels of government that are designed to encourage them into the market. 5. Credit crunch You’ll need a good credit history to be attractive to lenders. Check yours out by using companies such as Experian and Equifax. If your track record is not the best, we can discuss ways to address this. If errors appear in your credit history, dispute them immediately. 6. Find the right loan You can save thousands of dollars by choosing the right mortgage product for your situation. It pays to shop around and make a note of not just the interest rate but the fees that come with it and other services that may be offered. As your mortgage broker, we can guide you through this process. 7. Be pre-approved A written undertaking from your lender will help you focus on what you can afford, as well as signal to a prospective seller and their agent that you’re not kicking tyres. Watch out for lenders who will only “pre-qualify” you, as this represents only an estimate of what you can afford and does not offer any guarantees of intention to lend. Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.