Should I sell my home before I buy a new one?

According to a survey, for 61% of Spaniards who purchased housing in 2014 it wasn’t their first shopping experience. This means that buyers who already have housing, in many cases, rented or sold towards the payment of the real future. With low housing demand and prices falling from highs, some decide to rent but, if you choose to otherwise what to do first: buy or sell? Should I sell my home before I buy a new one?   In the years prior to the crisis, was begin with the purchase and then to sell the House. In fact, all financial entities helped with banking products that are conducive to this type of operations. However, with the bursting of the bubble, many families who purchased a new loan ended up not to sell their previous home, staying with two mortgages that they could not afford. This led to evictions and the thousands of bad experiences that we know today. Learned the lesson and with the current economic and employment landscape of the country, today all experts recommend, always, to sell and then buy. While it is true that there are financial products that allow this type of operations, the conditions tend to have more disadvantages than advantages, and to consider a risk operation, the Bank usually require a high economic profile. For this reason, before investing in a new home, should have very clear the economic situation of each and the budget that it has. Should I sell my home before I buy a new one? The strict conditions for access to credit makes that, if there is liquidity, is difficult to qualify for a mortgage, hindering the sale of houses. Indeed, according to the survey “Experience of sale 2014”, carried out by the real estate portal, the Spaniards take an average of 11.5 months to sell your home. In addition, the constant fall in prices, except in areas prime, it is in many cases not getting the desired capital to facilitate the purchase of the new property. According to the study, “The profile of the buyer in 2014”, the main reason why the Spanish homebuyers is because they want a better home, either because they have found a property that fit most needs, want to move to a neighborhood better. However, sell implies lower, on average, 15% starting price (€43.497). Thus, they buy at a low price, but because they have also sold at a low price. For this reason, and to avoid “pinching fingers”, it today is normal that you want to sell before you buy. Advantages of selling before buying -The economic tranquillity offered by this operation. Know what you have and, as a result, you can spend. -Do not you’re forced to lower the price because you run fast sell. You can expect someone to buy for what you ask or make you a good offer. -It is easier to gain access to a mortgage loan, if necessary. -There are more likely to be able to negotiate the purchase price, since a money for entry is available or you are mortgage-free. -Reinvest the money from a sale in the purchase of a home is to save capital gains taxation, provided that in the case of residence and the purchase is made before the two years from the date of sale. -Where is sold and you do not know what to buy, you can always choose to rent. What to do if you want to or need to buy before selling? Certain circumstances as finding housing that fits what you need or have to move to a particular site or on a date fixed by working or family issues, for example, can lead to buy before selling. What can you do to minimize the risks? -At the time of booking housing, pay and minimum signal, if at the end the housing could not be acquired. -Agree on a few clauses least restrictive possible in terms of deadlines for purchase after pay and signal -Before of buying, try to negotiate a lease with option to purchase that will allow, while the sale, like rental housing and avoid a new mortgage up to then. -Be aware of the available budget and think about what will happen if it is not sold the floor to last one or two years. Could I pay two mortgages? -Make sure that you can pay credit to finance housing, if needed.

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