Making an Offer on a House Before Selling Yours

Written by Nicola Ryan

12th Jan 2023 (Last updated on 12th Jan 2023) 5 minute read

Can I Buy a House Before Selling Mine?

You can put in an offer on a house before you sell your existing property. However, not all sellers may take your offer seriously if you have not sold your property. This is because the seller may prioritise other buyers such as cash buyers, first time buyers, or those who have sold their property. There is less risk of the sale falling through, while also ensuring that they have the funds to purchase the property. The aforementioned parties are also chain free, meaning that there is less chance of delays.

If you require a mortgage to buy a new property and have not sold your property, the seller may reject your offer. This is because you will not have the guaranteed funds at this stage.

Estate agents must submit all offers to the seller. However, this does not guarantee that your offer will be accepted.

Read our guide on Making an Offer on a House in 2023

How to Make an Offer Before Selling?

There are multiple things you need to make sure are in place if you are making an offer before selling. This will boost your chances of the seller accepting your offer. Here are the best ways to make an offer before selling:

Have Finances in Place

The first thing you need to do is make sure that your finances are in place. It’s best to talk to a mortgage lender and receive a Mortgage Agreement in Principle. This will provide proof to the mortgage lender and ensure the seller that you are intending on buying the property.

You should also consider various fees that you will have to pay such as Stamp Duty Land Tax and Capital Gains Tax.

Use our Stamp Duty Calculator to work out how much Stamp Duty you will owe

Bridging Loans

A bridging loan is an interest-only loan that is designed for short-term use. They are called bridging loans as they are designed to bridge the gap between the debt and receiving funds at a later date.

They help people who are purchasing properties as they can alleviate the financial strain while you wait for your funds to come in from the buyer.

Bridging loans have high-interest rates, meaning that you will be expected to pay back a higher chunk of money when your funds come in.

Cash Buyers

You may want to consider accepting an offer from a cash buyer, even if it is lower than your asking price. Because cash buyers don’t require a mortgage lender, there are fewer obstacles to the sale. They are also chain free, meaning that there is minimal risk of the sale falling through.

Read more about How to Buy a House with Cash

Don’t Overvalue Your Home

You should hire a surveyor to conduct a Valuation on your current property. This will show that you are aware of the property’s current value. It will also give you a good indication of what to ask for when you put your property on the market.

When you receive a Valuation from your surveyor, make sure that you don’t overvalue your home. While everyone wants to make as much money as possible from their home, overvaluing your property will most likely detract buyers. This means your property is likely to be on the market for a long time.

Do Market Conditions Play a Role?

Market conditions can play a huge role in whether you can successfully make an offer. If there is a lot of demand among buyers, the seller will most likely feel inclined to accept an offer from someone who isn’t part of a property chain.

However, if the seller hasn’t attracted many buyers, they are more likely to consider your offer more seriously. This is especially the case if you can prove that you intend to move out of your current property.

Making an Offer Before Selling in Scotland

If you are looking to buy a house in Scotland, the process differs slightly. If you don’t have the funds available when you put in an offer, you won’t be able to make an offer. This means that property chains aren’t seen in Scotland. For those who need a new mortgage, you will have to sell your property beforehand.

Read more on Buying a House in Scotland

Is it Better to Sell my House Before Making an Offer?

This is dependent on your specific situation. As with any major investment, there are advantages and disadvantages that you need to be aware of before making your final decision. Knowing the pros and cons allows you to make a fully informed decision.

Advantages

• You will have the finances needed to purchase a property
• You will be part of a quicker property chain
• You’ll have a clearer idea of your budget
• The conveyancing process is more likely to go smoothly

Disadvantages

• You will need to move quickly
• There may be extra costs to put your belongings in storage
• You may have to rent a property in the meantime
• You may have a lower budget if you have sold at a bad time

Can I Buy and Sell at the Same Time?

Buying and selling properties at the same time is what most people do who are looking to move up the property ladder. Making sure that you are as organised as possible will ensure that you go through the process efficiently and stress-free. Here are the best ways to buy and sell your property at the same time:

Exchanging Contracts

The first tip is to exchange contracts as soon as possible, ideally on the same day. This means that you will receive the funds to purchase the new property almost immediately, eliminating the need for a bridging loan.

Negotiation Period

In order to ensure that you exchange contracts quickly, you can use the negotiation period to your advantage. If your buyer has certain requests or requirements, you can choose to arrange a deal. This allows you to continue with the proceedings more efficiently.

Settlement Contingency

Lastly, including a settlement contingency in your contract ensures that you will not be in debt. A settlement contingency means that your property purchase will only go through once your current property has sold.

Finding a Conveyancer

At Compare My Move, we can connect you with up to 6 conveyancers. Our simple comparison form allows you to compare quotes and save money on your conveyancing fees.