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Buy before you sell or sell before buying?
Sell then buy or vice versa? Between renting a home in-between and the anxiety of the bridging loan … This is the question that the owners ask before embarking on a new real estate project. All you need to know to make the decision that suits you.
Buy before you sell
What are the advantages of buying before selling?
- You have more time, for example, to do some work.
- You are ready to give in to the crush.
What precautions to take?
- Evaluate very precisely the price of your apartment to be as realistic as possible about your personal contribution and the financing plan of your next real estate project. It is therefore even more important to call on a real estate professional.
- Anticipate a bridging loan
The bridge loan
This transition credit can be granted for a few weeks up to two years maximum time to sell your apartment and not have two real estate loans.
It is calculated based on the value of the property you are selling, it is on average 70% of the estimated price.
The advantage of this loan is to be able to buy a property quickly, without waiting for the sale. In short give yourself the opportunity to give in to a crush.
The bridge loan is a riskier bet, which can be expensive in times of crisis, difficult market. Hence the importance of seeking advice from your real estate agent.
VINCENT’S ADVISE
“Anticipate twists and surprises”
It is important to anticipate, there are often twists and surprises. It is therefore important to consider a bridging loan with his banker.
I always advise my buyers / sellers to provide a longer period between the promise and the final deed of sale of their property. The usual time is about 3 months, it is not embarrassing for buyers to wait 3 more months for the sake of their dream. Which leaves 6 months to the seller to find the apartment of his dreams by mastering the time, his financial capacities and thus to be able to limit or even avoid the costs related to a bridging loan.
Sell before buying
What are the benefits of selling before buying?
- You do not take the risk of bearing the expenses of two houses and the bridging loan.
- You know what personal contribution you have.
What precautions to take?
- Anticipate your acquisition project and define the criteria for choosing your future apartment to put your home up for sale as soon as possible.
- Secure your sale, a transaction never made before the bill of sale.
- Sign, to the extent possible, the promise to sell the home you are buying when you are sure that your buyer has obtained credit.
- Negotiate with your buyer, if he is not in a hurry, to extend the 3-month period of use between the sales agreement and the bill of sale.
Can the keys be handed over before signing the deed of sale?
Buyers sometimes issue this request for early delivery of keys, for example, to do work. If this is legally possible, in case of non-completion of the transaction, you run the risk of finding yourself with an occupant without right or title. In the event of a claim, you may not be covered by your insurance.
VINCENT’S ADVISE
“Avoid risks, but also frustrations in the buyer”
“In any case, I advise my sellers to give the keys of their apartment to their future buyer before the property is sold. The risks are too great, even if the property is empty. In order to avoid any frustration at your purchaser, I propose to use a little excuse of the type: “Sorry, but we lend our apartment to our cousin who comes to stay in Paris for some time. “
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