How do I buy before selling?
Would you like to buy a property before selling? Find out how. Our brokers are here to help you.
Homeowners, if you’re planning to move, you’re probably already looking for the perfect place to relocate. Suddenly it’s love at first sight: you’ve found your future cosy nest! The problem is, you still haven’t sold the property you have to vacate… So how can you buy before you’ve sold?
Build on your financial strength
If you have the funds to go it alone, that’s a good start… But be careful! Make sure you have enough cash to avoid putting yourself in a precarious financial situation before you consider buying your second property. Not only will you have to bear the cost of the purchase, but you’ll also have to double the expenses associated with owning two residences: property taxes, maintenance costs, mortgages… for a period of time you won’t know when you start!
Be followed by a lender who agrees to make you a bridging loan
The second option would be to find a lender to finance your project. Your bank may offer to do this via a bridging loan, in which case it finances the down payment by pledging the equity in the property for sale as collateral. This solution is not systematically accepted by financial institutions, especially if they consider your property complicated to sell.
Make an offer to purchase conditional on sale
You also have the option of adding a special clause to your promise to purchase, more precisely, a conditional purchase clause. This means you reserve the house while you sell yours. If the seller accepts – because he’s under no obligation to do so – he’ll set a deadline, although some don’t allow more than two weeks. This clause is all the more difficult to obtain in an overheated market where the seller receives multiple offers…
In any case, don’t rush into anything and ask yourself the right questions. Is this THE rare pearl, THE bargain below the market? Or will it be impossible to find an equivalent once your property is sold? It’s up to you to decide!