Buying & Selling at the same time? Doable?

[ozzier]

Hi all,

Wanted to pick your brains a bit and get your view on this.
My parents are pensioners and own their home. They are thinking about selling that house and buying something cheaper, newer, and closer to me. Their house value came up around $360-370K (according to real estate agents), and they would ideally buy a house for less than that as at this stage of their life, they wouldn't be able to get, or pay for, a loan.

My question is, how hard is it to sell & buy at the same time, and having two settlements a the same time? I.e. put their house on sale, find a buyer for that house, have a 3-6 month settlement, and in that time find something else, and settle both houses at the same time.

Is this do-able? Any risks involved?

I haven't seen any topics on this on this forum, so I thought I'd ask!

 

[tobe]

yes its doable, and pretty common.

Yes, there are some risks, but no more than usual.

Obviously wait until they have an unconditional offer before starting to look for their purchase.

 

[Big Will]

Also make sure they have a long settlement on their sale and if possible can bring it forward.

A good buyer would be a first home buyer who is ready to move in now and doesn't need to sell their place to buy your parents.

This way when your parents do find something they can potentially be more accommodating on their purchasing vendors timeframe.

 

[Terry_w]

Best to sell first and then enter a contract to buy.
Nothing worse then having sold they still haven't found a place to buy with the settlement period ticking over.

 

[Brady]

Pending how much they're planning on spending for the purchase.

I've done a reasonable amount of loans for elderly clients in this situation, a lot will sell before they buy. But some want to transition over, this is where a bridging loan can work. 12 months maximum of both properties, note covering interest repayments during the period whilst selling. Then at end of bridging period once property sold debt to be reduced to a agreed level with the bank, in most cases it's paid off in full as downsizing.

Straight forward process, main points, valuations, equity in property, ability to service debt/interest during bridging (can borrow for this if required/able), interest rate is same as normal loan.