If you already own a home and are trying to work out how to buy and sell in the same market, this episode breaks down the key decisions, risks, and strategies you need to understand in today’s Brisbane conditions. Scott and Melinda share practical guidance to help you approach this transition with more clarity and less stress.
In this episode, we cover:
- Selling first vs buying first and how each approach impacts your position
- How timing in a rising market can influence your purchasing power
- The realities of subject-to-sale offers and why they can limit your options
- Alternative strategies like longer settlements, rent-back agreements, and bridging finance
- The true costs involved and why planning ahead is critical
- How to avoid rushed decisions and reduce unnecessary risk
If you’ve been unsure how to coordinate your next move without unnecessary stress or risk, this episode will help you understand your options and take a more structured approach to the process.
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Transcript
0:00: Buying and selling in the same market, how do you do this without losing sleep?
0:03: This is going to be a very practical, reassuring episode for upsizers, downsizers, and lifestyle movers who already own a home, but they feel stuck because the process seems too risky or too hard to coordinate.
0:16: Hi everyone, and welcome back to another episode of the Brisbane Property podcast with Scott and Melinda Jannison.
0:22: Interesting episode today, Melinda.
0:24: How did, Avoid losing sleep, I guess is where I’m going to, but buying and selling property, and then doing it in the same market, and we’re gonna talk about how you can do that without probably stressing out and losing sleep.
0:36: Yeah, it’s a very big topic at the moment because obviously property prices have escalated so rapidly in the last 5 to 6 years across Greater Brisbane, and in fact across all of Australia, but here in Brisbane.
0:50: And property values have almost doubled in that time, and what that means is, for many buyers who are looking to sell their home and buy another home, a lot of the equity that they’ll be relying upon for the purchase of that new property is actually locked into the sale of their existing home.
1:10: So it becomes really tricky to be able to, obviously, buy without selling.
1:15: First, and we’re going to provide some practical insights into what some buyers are doing at the moment, how they’re bridging that gap, and some helpful hints.
1:25: We’ll provide some helpful hints for people that are looking to go down that path.
1:30: I guess the positive to it, and one thing we, we always talk about is buying in a market and being out of the market for too long.
1:37: So you don’t, you don’t, sorry, selling in the market.
1:40: So if you’re selling in the market now and you’re out for a long time, you, you could start to miss the market and it gets away on you a little bit.
1:46: So I guess the positive on this one is if you’re selling at the moment and then you’re looking to buy straight away or buying and selling in that same market, that’s probably a good thing.
1:56: But again, it can be really overwhelming for people as well.
1:58: It can, and, you know, on the opposite end to what you’ve just said, Scott, sometimes in a market that might be in decline, selling first and buying later can actually result in, At a better outcome.
2:11: But of course, that’s not the market that we’re in at the moment here in Brisbane.
2:15: Brisbane is different to some other markets around Australia in terms of the direction of price growth.
2:21: And therefore, it is a bit tricky if people do need to sell, if they need to unlock that equity that’s sitting in their current home, and therefore provide or find temporary accommodation elsewhere for a short period of time.
2:34: Not only is there additional cost in relocating elsewhere, but there’s also that.
2:40: Time or that opportunity cost that you’ve spoken about there, Scott, where if you are out of the market and you can’t find that new home quickly, and then the market continues to grow in value, you may actually reduce your borrowing power in terms of what your budget will buy, and that also is something that buyers need to be aware of.
3:01: And we’ll jump into lots of different pros, cons, tips as well as we go along.
3:06: And the other thing that when we talk about selling first and And as you mentioned, moving into some temporary accommodation, vacancy rates are so tight in Brisbane as well.
3:14: So when we look at Brisbane in particular here and and this is what we’re talking about is when you’re buying in a market that is still moving up in value.
3:23: OK, so property prices are still continuing to increase.
3:27: And there’s also not a lot to rent.
3:29: That’s right.
3:29: So vacancy rates are so, so tight, people have to either be able to move in with someone else, find some temporary accommodation somewhere.
3:37: Actually I spoke to someone the other day, they, they talked about they might go on a holiday for a while, so it’s not a bad it’s not a bad idea, get away and, and, and, and take that time to have a holiday before you come back to move in.
3:47: Engage a buyer’s agent to assist them while they’re on holidays, is that that was, that was their plan, so.
3:53: so it’s interesting that that part of it, and that’s something obviously people have to consider, worry about or think about if, if you’re going to sell first before you continue then to buy and, and where are you going to live as well.
4:04: So that’s one of the, the issues that, that people that need to sell will face, obviously, where will we live, what will our temporary accommodation look like, and for many people that’s a lot easier in the event that, They have family or friends that they can rely upon.
4:19: The, for those that don’t, and they are looking at renting accommodation, obviously, it’s really a good idea upfront to get an understanding of what is available for rent, and what are those costs going to be to you as a tenant, in the event you can find rental accommodation, because you do need to price in the cost of temporary accommodation.
4:40: In your figures, when you’re working out what will your property sell for, how much is it going to cost me to rent short-term, and how much will I have left to buy back into the market.
4:49: So, that’s definitely something that a lot of people transitioning from one home into the other must think about.
4:55: And of course, if that is the plan, it’s also understanding whether there’s going to be an appetite for entering.
5:02: Into a 12-month tenancy agreement, and potentially breaking lease in the event that you find a home sooner.
5:08: Or alternatively, you might be looking at short-term accommodation, which is going to be more expensive if you are renting accommodation over a shorter period.
5:18: So, again, it’s so important to research costs, understand where you are likely to live on a more of a short-term basis.
5:25: And what are properties like that costing you in terms of long-term rental accommodation or short-term accommodation?
5:32: It’s really important that you’re doing that research as well.
5:35: Let’s look at the, and go through some discussion on the pros and cons both ways, I guess.
5:41: So there’s, there’s selling first and there’s also buying first, and we can probably bounce around between the two of them just to see how, You know, what what’s good for certain things and obviously how, how you can play things out.
5:53: So obviously if you’re looking to sell first one that’ll actually give you the the money.
5:58: So looking to buy another property in a competitive market again like we’re in Brisbane at the moment, you need to have that money.
6:04: So if you’re putting things subject to sale, I think you’ll struggle.
6:08: I I really think you’ll struggle in Brisbane at the moment.
6:10: So having your finances up in in play, you can give you better options to maybe go on unconditional offer, things like that.
6:16: So it’s it’s making your conditions more favorable then.
6:18: And let’s just unpack that subject to sale point that you just made there, Scott.
6:23: So, what that technically means is that if you are looking to purchase another property, you can put a special condition into the contract of sale, which enables you to enter into one contract to buy the new property, but that contract is actually tied in with the sale of an existing property.
6:42: And that’s done under what we call a subject to.
6:45: Sale clause, which is something that the solicitor would draft in order to tie the two contracts together.
6:50: What that would mean for the purchase that you’re making, is that, if your offer is accepted, you generally have the opportunity only to proceed with that purchase, once your property sells.
7:04: So, the purchase is tied in with the sale of your property.
7:07: Now, of course, for the seller of the property that you’re looking To buy, that’s not the most certain outcome, especially where there’s no time frames that are mentioned.
7:18: Even if there’s time frames, perhaps of up to 3 months, it doesn’t provide that seller of the property that you’re looking to buy with much certainty around the sale.
7:28: And, of course, we talk quite often on this podcast about having strong and competitive conditions when there’s a lot of buyer competition.
7:37: So, what we would encourage you to do is understand what is it that you are looking to buy, and how competitive is that segment of the market.
7:46: Because in some parts of the market, it simply might not even be a feasible way to commence a property buying journey, because, if Sellers are not even likely to consider a subject to sale condition in a contract, you’re better off knowing that before you find something, and fall in love with that, and waste time going down that pathway.
8:08: And the best way to uncover that is to call some agents in the area that you’re looking to buy, and actually ask the question, I’m a subject to sale buyer, would any offers that I make be considered favorable by the seller in the market that you’re operating in?
8:24: And then you’ll get some honest feedback about how competitive the market might be.
8:28: If you’re not willing to rely on, the advice that a selling agent provides.
8:32: Of course, buyers agents that operate in that area, who do represent and advocate for the buyer, exclusively, they’ll be able to tell you how competitive a different product type, or different locations are, to enable you to feel confident about progressing with a subject to sale clause or not.
8:49: Now if a property’s going to auction, you you you can’t you can’t even go to auction.
8:54: So that’s right.
8:55: You’ve also got to understand that, that I mean what Melinda’s talking about there is basically a a a negotiation type of situation where, where someone’s going to sell their property and they’re open to negotiation side of things.
9:07: If a property’s going to auction, you need to be cash unconditional ready to go.
9:11: So you need to buy it under auction conditions, which means obviously if you’re subject to sale.
9:15: You won’t be able to attend the auction.
9:16: So, it’s going to reduce those opportunities when it comes to that sort of things as well.
9:21: Yeah, it certainly takes out a part of the market of those properties that do typically sell by auction, and that’s something that being a subject to sale buyer, means you will actually miss out on, on those properties.
9:33: Now, of course, as a seller that’s looking to buy, there may be other options that are available to you, if you’re not wanting to pop yourself into short-term.
9:41: accommodation, or enter into a long-term tenancy agreement between the settlement date for the sale and purchasing another property.
9:49: Now, some of those solutions are things like negotiating a longer settlement with the purchaser of the home that you’re looking to sell.
9:57: And that’s a discussion that is important for you to have with the selling agent that is engaged to represent you.
10:03: Ultimately, if you have a contract on the property, That might have a 60 or a 90 day settlement, it gives you time to commence the search for the purchase.
10:13: However, I will still state, and this is very important for you to understand, is that you still will technically be a subject to sale buyer in the event that you need to rely on the settlement funds of the property that you’re selling in order to purchase the next property.
10:29: So, there’s still going to be a special condition that’s Drafted into the purchase contract, to ensure that both properties are locked in.
10:38: Where that becomes a little more favorable, compared with the first scenario, is that if you already have a contract on the property, and that’s unconditional, the risk to that seller of the property that you’re looking to purchase is a little bit lower, and that can be communicated effectively through the sales agent that you might be purchasing through.
10:56: I, sorry, can I just jump in there?
10:58: I think that’s People need to understand, and we’ve had this sometimes before where people say, oh look, I’ve, I’ve sold my property, it’s unconditional, so I, I’m right to go and buy a property and away I go.
11:08: It’s understanding the risk that you’re putting yourself at.
11:11: And that’s something that we talk to our clients and we work with because, OK, the risk might be a little bit, a lot lower, a little bit lower, however, however you wanna put it, but let’s say your property, the person that’s buying your property that’s gone unconditional.
11:25: And they turn around and they actually can’t settle on the property when it comes to settlement time.
11:29: So it becomes a, yes, it becomes a legal battle and you can sue them and all those sorts of things which gets really messy.
11:35: But at the end of the day you can’t then settle on the property you’ve purchased.
11:38: So you become in breach of that contract as well.
11:40: So that’s right.
11:41: It’s understanding that risk and that’s the sort of thing that people really need to understand what risk they’re they’re actually putting themselves in.
11:48: And obviously, these are some of the reasons why aligning yourself with a professional team of advisors before you go through this process becomes very critical in getting the best possible outcome.
12:00: Of course, solicitors are there to advise you on risk, especially in relation to contractual risk, but ultimately, a buyer’s agent who might be representing you can help you to understand what makes a competitive offer, versus what exposes you to risk, and finding that right.
12:16: Balance, because the last thing that you want is to try and be more competitive on terms if that actually exposes you to significant risk.
12:23: That’s not a good scenario or a good outcome for you whatsoever.
12:27: So, the other one, apart from the long settlement is the rent back side of things.
12:31: So, that’s right, in the property that you, you may be looking to sell, again, working with your selling agent to get advice on this, there’s going to be some buyers in the market that are property investors who potentially would Be interested in providing you with an optional rent back.
12:49: What that means is that as the seller, you can actually, go ahead and settle after 30 days, and rent your home back from the new purchaser, which enables you to have funds in the bank, whilst then going out to find your next property.
13:06: Now, obviously, that’s going to reduce the purchaser volume for the home that you’re looking to sell, and that’s Something to discuss with your selling agent, but these are options that are available to you.
13:17: And in the event that you’ve got a selling agent that has a strong database, where they know they have property investors looking for the type of asset that your home might create for them, then obviously that will become something that they can work their database to talk through, or discuss with the property investors that they’ve been working with, for the fact that there’s a home buyer, I’m sorry, there’s a home seller, that’s looking to Sell, they would love a rent back.
13:42: Can we bring you through the home?
13:44: And this is obviously what good selling agents would do.
13:47: They would know who their buyers are, and when they do have property investors, that’s actually a favorable outcome for the property investors as well.
13:53: Yeah, and it can go both ways, obviously.
13:55: If you, if you’re selling your property, that rent back, if you’re buying a property, you could offer the rent back.
14:00: There’s different ways to work that, and again, that’s, that’s what we’re talking about, whether you’re buying or selling in this market, so that you can try and make sure that things, Run as smooth as possible, really, so to take away that stress, which is what we’re basically going through the whole, whole episode here I guess.
14:15: And look, for some buyers, obviously, if you choose to buy first, and not go down that pathway of putting your own home on the market to sell before you actually start or commence a, a search for a new home, there is the option in the event that you don’t have the funds available to service both loans.
14:35: Perhaps the, the property that you’re selling, and also the property that you’re buying.
14:39: There is a solution.
14:40: Called bridging finance.
14:42: Now, in the event you don’t understand what bridging finance is, we strongly encourage you to speak to a licensed mortgage broker, or to your financier, whether that’s a bank or something similar, to understand what are the costs involved, and do we, do I qualify for this type of bridging finance.
15:00: What it enables you to do is put in place some temporary funding.
15:05: That covers the period between when you purchase the new home, and when you sell the existing home.
15:12: Now, bridging finance is a lot more expensive than standard residential lending, and that’s why it’s critical for you to understand what costs are involved.
15:22: Now, you might weigh up those costs, versus the cost of selling, renting, and repurchasing, and having to relocate.
15:31: More than once, because, ultimately, the decision that you make as to whether to buy first, or whether to sell first, should make sense financially, but it also needs to suit your lifestyle, because, obviously, you know, for some people, you might have young children at schools, you’re not wanting to shift schools, you’re not wanting to be inconvenienced by longer commute times.
15:53: paying more for bridging finance might be a better.
15:55: Solution in the event that, you qualify, as opposed to perhaps downsizers who are less restricted by location, who are more open to living somewhere temporarily, and therefore, that, that option might be better suited to them.
16:09: I, I think a lot of this as well comes down to the planning side of it.
16:12: It does.
16:12: So it, it’s not just saying, look, we wanna, we wanna do it now, we want to sell, we want to buy, and, and that’s, that’s getting into the, you know, you could put yourself under more pressure.
16:21: That way through that time side of things.
16:23: But if you actually start to plan things out so that you can understand and again have, have a plan B, have different sort of setups so that you can say what is my plan here, what happens if I do this, what if we move that, what’s it gonna cost us?
16:35: What impact’s it gonna have on our family or our stress sort of things.
16:39: It gives you more time then because especially if you’re looking to buy a home and you find a home that you absolutely love.
16:46: You don’t want to get caught up in that emotion of oh we’ve got to do it really fast and you’re caught up in everything and, and that decision gets rushed then as well.
16:53: So you need to make sure you plan things and say if we do it this way or this way or this way, you’ve got different options to be able to consider it and take your time to make sure you can make a really informed decision.
17:04: And of course, just talking about feeling rushed, of course, if you do sell before you buy, and you’ve got a very strict time frame to make that new purchase, you can actually start to make more emotional decisions.
17:18: You can get stuck in a position where you’re likely to overpay just because you are constrained by time, and that’s a very dangerous position to put yourself in.
17:28: It exposes you to much higher risk because those decisions become less objective.
17:33: and more emotional.
17:34: You don’t want to feel rushed between transactions, and especially if you’re acting alone and independently, that time constraint can put a lot of extra stress on you and your family and your circumstances.
17:47: So, it is important that you are controlling that that decision not to feel rushed, or engaging professionals that typically will reduce that time frame for you when you otherwise would feel rushed and, and constrained.
18:01: That’s obviously one of the key benefits of partnering with a buyer’s agent, who has a strong network, in the event that you don’t have the time to be putting yourself into the search position full-time during that period between selling and buying.
18:16: That’s obviously where a professional team can come into play and assist you.
18:19: I think another good part of the planning side of it as well, and this is, we do this with our clients, is forming a brief.
18:26: So really sticking to your brief and not starting to wander.
18:29: Off and get caught up looking over here or looking at something different and you see all the bells and whistles and all of a sudden that changes what you’re looking for.
18:37: So really sticking to your guns and sticking to your brief.
18:40: So the actually after the the outcome long-term wise, so that you’re not making a mistake and just jumping in and and buying something just because it pops up straight away as well.
18:49: And of course there’s that risk that you’re going to overestimate the selling price of your home and then underestimate the purchase price of the new property that you’re looking.
18:58: To buy, we’re all very emotionally connected when we sell, and we all feel that our properties are worth more, perhaps, than, than where the market’s prepared to offer an offer.
19:07: But also, when we buy, typically we see value at a lower level than where the sellers see value.
19:13: So, we need to ensure that we are accurate with our numbers, when we are running the analysis of what is it going to cost me to sell, what cash am I going to be left with, and therefore, what is my purchase budget.
19:26: It likely to be, because if those numbers are tight, that can mean the difference between one suburb and the next, or it can mean the difference between a renovated or an unrenovated home for the next purchase that you’re looking to make.
19:39: So, understanding those numbers before transitioning through the process is also critical.
19:44: Oh, I think that’s probably one of the most common things we, well, it is very, very common for owners to think their property is worth a lot more, and buyers think the property is worth.
19:53: Worth a lot less.
19:54: That’s right.
19:54: So there’s always that in between mark where you which you’re trying to match when you’re starting negotiations as well.
19:59: I think having a team around you is really important as well.
20:02: So as we talked about whether it’s a sales agent, whether it’s a broker or or or bank, your solicitor, your buyer’s agent, so having the having the team around you so you can make a clear plan and a clear decisions so that everything works into play, the timing’s right, the finances right and everything’s set up so that everything moves along on the same path.
20:22: And also someone to bounce off as well.
20:24: Someone there to actually talk to and and actually consult to say, OK, I’m thinking about this, what do you think, and actually bounce those decisions off someone as well.
20:31: And of course, you know, we, we have, partnered with, many buyers that are in this exact position, and we will always assist them by guiding them through the sale before we actually commence on a partnership to find the new home.
20:46: And what is actually alarming for Us is many times, because we know that there is a motivation to sell very quickly, because they’re wanting to purchase a new home, sometimes we see selling agents condition the, the price down with the very first offer that might come in as well.
21:04: And that’s an alarming behavior that we, we witness.
21:08: So, you need to be mindful in that position also, that as the seller, you don’t become desperate, and that you don’t just accept the first offer that comes in.
21:17: You want to ensure that the agent who’s representing you to sell the property is working as hard as possible to get the best possible price, which there’s many sales agents across Brisbane that would do that.
21:27: But also, that they’re negotiating the terms that are going to be favorable to you, and that’s why we talk about longer settlements, or optional rent backs as being options available to you, so that the agent can have those clear conversations with the buyers that they’re working with, when they’re looking to sell your home.
21:44: So I, I guess one of the questions that we all then is it better to buy first or to sell first?
21:50: I mean it is a, it’s a pretty, pretty open ended question I guess, and it would come down to individual requirements or individual needs and things like that as well.
21:58: So whether you’re to buy or sell first, maybe I’m probably thinking you sell first, makes it more competitive when you start to look to buy, but, You’ve also have to have something lined up so that you can live somewhere, you can move somewhere, you know, and you’ve got somewhere to, to move to as well.
22:12: So I guess then when it comes down to it, planning is a big thing, having the right team around you, and to be organized when it comes to that sort of things for the for buying and the timing of the selling as well.
22:23: And I think that you’ve also got to understand people need to do their research on how much the whole process is going to cost.
22:31: So understand how much it’s going to cost to sell, what your selling agent fees are, your solicitor fees, what are the costs for that transient accommodation if you are looking to go into the long-term rental market, or a short-term accommodation provider.
22:45: also, you need to price in, any costs of rent backs, if that’s something that you’re able to arrange.
22:52: Then you’ve got the buy costs, so in the event that you’ve got to Purchase elsewhere, it’s going to include stamp duty costs, legal fees, buyer representation if you are going to use a buyer’s agent.
23:02: All of these things need to be factored in, and, of course, bridging finance, if that is the method that you’re choosing to, to bridge that gap between buying and selling.
23:11: Once you understand the numbers, the whole decision-making process becomes more clear.
23:17: And if you don’t understand how to Articulate those numbers, even around sale value and purchase value, because that’s often what people get wrong.
23:28: They overestimate the sale price and underestimate the purchase price.
23:32: If you’re not getting accurate guidance around all of those pieces of the puzzle, reach out to a professional team, like Streamline Property Buyers, because we can guide you through that process.
23:43: And a buffer.
23:44: I think that’s the other thing we did, we talked about earlier, like, don’t forget that, a seller, as we said, When people own their own property, the sellers will think it’s worth a lot and buyers’s always worth a lot less.
23:56: So there is that buffer there, you don’t want to get caught out where there’s that gap as well.
24:00: So make sure you allow a buffer there for that sort of things as well.
24:03: And there’s no position that’s more detrimental than being in the position where you’re feeling rushed.
24:10: That is, you’ve sold, and you’ve got a limited time to buy, because that’s when you’re going to make emotional, irrational decisions, and often that can lead to overpaying, and that’s something that you need to be super mindful of, and it’s another reason why getting some professional guidance is going to be able to assist you through that process.
24:29: Excellent.
24:30: That’s a bit of a wrap.
24:30: Hopefully that helps and gives you a bit of an idea of some things to think about and consider and obviously avoid making.
24:36: That’s, that’s a big part about it, I think.
24:39: Look, I will let Melinda wrap things up as I normally do.
24:41: It’s been great talking again and until next time, take care, and we’ll talk soon.
24:46: Bye for now.
24:47: Thank you once again for joining us on today’s episode of the Brisbane Property Podcast.
24:51: We hope you have enjoyed this episode, and we hope that it’s provided some practical guidance for what you need to consider in the event that you are.
24:59: Needing to sell before you buy here in Brisbane.
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25:18: Until next time, we hope you have a great couple of weeks, and we’ll be back in touch again soon.
25:22: Bye for now.