If you are looking to take advantage of the property market opportunities right now, you will not want to waste any time. If you have an existing property that you need to first sell, you may want to get it on the market sooner rather than later.
While you do not need to sell your existing property before you buy another, it could help avoid disappointment if you have your heart set on a new dream home. According to the Seeff Property Group, selling first might also put you in a better bargaining position, but it depends on the circumstances.
Gerhard van der Linde, MD for Seeff Pretoria East, says the ideal is usually a “clean” offer which is not subject to the sale of another property. Where a buyer first needs to sell an existing property, this will be included in the Offer to Purchase by way of a suspensive condition to the offer.
The risk arises with buyers who frequently make an offer on another property based on what they expect for their own property which has not yet been sold. On the other hand, if you sell first, you could also run the risk of not finding a suitable new home in time.
Nonetheless, he says offers which are subject to the sale of another property are not discouraged, and many transactions are concluded in this way. In this instance, the agreement would include a condition which allows the seller to continue marketing their property. If another unconditional offer is received, the buyer will have an agreed period in which to make his transaction unconditional or abandon the offer.
On the other hand, says Tiaan Pretorius, manager for Seeff Centurion, if you sell before you buy, then there would be no obstacles which can prevent you from getting your dream home. If you still have to sell and had made an offer on another property, there is the risk that your property does not sell in time, or you might not get your asking price.
Offers which are not linked to a “subject to” sale also usually register a lot faster, and it might suit the seller better to rather take a “clean offer” with no suspensive conditions. It is the seller’s choice, but he recommends that the seller makes an informed decision by consulting with their agent regarding factors such as the potential of the buyer succeeding in selling, whether the property is priced correctly, or what other suspensive conditions there might be.
A transaction linked to the sale of another property also usually means a longer transfer period as additional parties are introduced to the transaction since there is a second sale involved, and all of those are linked to the first seller’s transaction.
Buyers, however, do not need to wait until registration before they can start to look for a new property. Pretorius says they can start looking as soon as the suspensive conditions are fulfilled on their sale.