James Greenwood of Stacks Property Search, advises: “If ever there was an ideal time to be a cash buyer, it would be now. The best position to be in as a buyer is to be unconfined by a property to sell. But the risks are high. If you had been out of the market for the last six months you would have seen prices rise by as much as 20%. But demand has been so strong, and supply constricted, that buyers offers that are subject to the sale of a property rarely make it into the running.”
So what is the best buyer strategy in these tricky times?
Charlie Rearden of Stacks Property Search, says: “Sellers who are also buyers need to be clear-eyed, informed and realistic. There's no blanket rule for navigating these difficult waters, it depends on your circumstances, what you have to sell, what you're looking to buy, your appetite for risk, and your finances.
“First of all get several professional opinions about how easy your property will be to sell, and at what price. There's sometimes an inclination to believe that your own property is more saleable and more valuable than it actually is. My advice would be to trust the professionals, and for the sake of your sums assume you'll get 10% less than you think for your own property, and will have to pay 10% more than you think for the new one.
“You will also need to be realistic about what it is you're trying to buy, how difficult that is to find, and what property of that kind is selling for.
“If the property you own is tricky to sell for some reason, and you're after a property that is fairly easy to find and in good supply, there's an argument for selling before you buy. For instance, if you own a small flat in London with no outside space, and want to buy a three-bedroom country cottage; get the London property away and go into short term rented. If your brief is wide enough for the country property, you should be able to secure a property fairly quickly as a cash buyer.
“But if you have an easy to sell property, and are looking for something that's in short supply, a cottage on the Cornish coast for instance, be more careful. You'll get your own property sold quickly, but will then find yourself cashed-up without anything to buy in a rising market. If you have a string of buyers queuing up for your own property, you may be able to hold onto the buyer, or negotiate a long completion date, while you search.
Charlie concludes: “Selling before buying can leave you in a precarious situation. The worst thing you can do is to make your brief so impossible to fulfil that you shut yourself out of the market for a long period of time. Flexibility and compromise will be your friends. And if you find what you want, don't wreck the deal by quibbling over the price. By the time you find the next one that suits you, prices may have increased across the board.
“In short, the best-case scenario is to sell and buy simultaneously. If you have motivating reasons for selling before you buy, leave as short a gap as possible. Go into rented property if necessary, but don't get too comfortable and allow the market to run away from you. Remember, no house is ever 100% perfect; if you seek perfection, by the time you find it you may not be able to afford it.”
