Sell and Buy Guide
More and more owners and buyers are trying to solve the question of whether to sell or buy first. It is true everyone has different circumstances, therefore we have put together this guide to help you navigate through your options.
“Why are you buying or selling?”, “When do you need to sell or buy?”, “How much will it cost?” and “What are you selling or looking to buy?”. These are common questions owners and buyers regularly ask, but we know there is much more to this, in particular a whole range of influential factors, some you may not be aware of.
From experience, when I worked in high risk and complex environments, preparation into how to deal with probable scenarios helped me make better decisions under stress. This could be repetitive practice or a form of critical thinking exercise. I find real estate no different. Agents work with owners and buyers whose house, money and livelihoods are being changed within a finite period. Therefore, doing the pre-work now makes the buying and selling much more productive and generally more enjoyable.
A relatively simple place to start, but a challenging one is
What is your owner, buyer (or both) profile?
It is important to take stock of where you are at. Your profile as either a buyer, owners or both will affect everyone around you during the process. It is prudent to do this to help discover your strengths and vulnerabilities. A great way to improve your profile is to seek advice, support from a professional, outsourcing, or self-education. The questions below will start to shape how you plan your next move:
- Do I need to meet a timeline?
- Who is dependent on me?
- Who am I dependent on?
- How much cash do I have?
- What do I know about selling, buying or doing both at the same time?
- How much equity is in my property?
- What liabilities do I have when I sell, buy or hold?
- What life cycle stage am I in?
- Who is in my networks that can help?
- Do I need to protect my spouse or dependents interests?
- What are my concerns selling, buying or both?
A further beneficial action is to rank the importance of these answers in a way they are ready to be called upon when making decisions later on.
Define the problem you are trying to solve
By doing this you save time and minimise frustration along the way. When you are defining the problem, writing it down will give you a clearer picture of what you are dealing with. I find the best way is to write it as a clear, concise, and complete statement.
A few examples are:
“The family needs to sell in a timely manner to ensure the children are settled in before school starts, we don’t have the cash or bridging finance to fund a short-term rental, therefore we need to buy & settle the home close to the sale, with little cash help from extended family”
“The family home is not utilized as much as it used to be, I need to see my family more often, the children live all around Sydney. I also have to bolster up my superannuation in preparation for retirement, I haven’t bought or sold in 20 years.
“Unforeseen circumstances have led to a forced choice to sell the family home, I have many properties I own to choose from but they are all on fixed lease terms”
Prioritise why you are selling, buying or both. Then rank them accordingly.
Ask yourself why I am doing this and their priority. Make a list of no more than 8, be clear and concise Then ultimately rank them against each other. As you pair them against each other, determine which one is more important. At the end the score will give you a rank of priority as to why and its importance. You can then compare this with your partner and family members list. It is important that the priorities between couples and family members are in some reasonable alignment.
- Dependents in my care
- Ready for retirement
- I need a bigger home
- I need a smaller home
- Support to others
Structure your research around the problem you are trying to solve, your priority and the impacts.
Research into areas of the sell, buy or both will save you wasting time, apply your resources more effectively and help you prepare for later on. In most cases the buy, sell or both will go hand in hand, in other words an action now will or may affect an outcome or reaction down the timeline.
In some cases, if you were to change course, it may impact other outcomes you were expecting to reach. Hence the need to also balance things that can’t change versus the things that can change mid-course.
An Owner may ask:
- Who is the best agent that can help me?
- How much is my property worth?
- How much will it cost to sell?
- What industry standard timeframes should I consider? Time to prepare the home for sale, suburb days on market, standard sales campaign, existing lease terms, available settlement terms and when do listings cycle onto the market.
- Who is likely to buy my property?
- If I buy first what benefits or risks will I have compared to selling first?
- What competition do I expect to have when I list my property?
A Buyer may ask:
- How do I write my buying criteria?
- What is my budget to buy, and will it meet the property criteria I have set?
- How much will it cost to buy?
- How do I set a limit when negotiating or bidding at auction?
An Owner and Buyer may ask:
- What’s the difference between an agent appraisal, owner price, a buyer’s budget, bank valuation, independent valuation and software appraisal?
- How do I know if the market is retracting, cooling, rising or hot?
- How does my owner or buyer profile affect the way I sell or buy?
- How do I handle bridging favourable and unfavourable terms and conditions with multiple parties involved?
Rank all the impacts and identify a center of gravity (COG) you must keep stable throughout for a successful sale, buy or both.
The Center of Gravity could be for example.
- The price difference between the buy in and sell out price, to achieve a certain amount of cash
- To meet a deadline due to employment, education, health or relocation
- Upsize or downsize criteria and budget must be met
- The sale price must be met
A compromised COG may lead to change that could of been prevented.
How you would protect the stability of these would be tighter research, professional support or the correct allocation of time and resources.
At Zimmermann Agency we are passionate about helping vendors and buyers make the right decision and answer the big questions. Are you ready to answer the big questions?