What to look for when buying and selling a home at the same time

When you're buying and selling a home at the same time, the anticipation of moving to a new home is a really exciting time, you get a fresh start with a brand new property. However, along with the excitement, you can also face a fair bit of stress.

We’re here to help though, as we highlight some of the things you should look to avoid and steps you can take to make your experience run as smoothly as possible.

Should you sell your house before buying?

Most people need to use the money from their existing home in order to buy a new property. That usually rules out buying your new home before selling. You could however sell your house before buying a new one. Although you’ll have to find somewhere to stay and store your things when you sell, this method can be less stressful and put you in a strong position as a buyer.

Can you offer on a house before selling?

Absolutely. Sellers may be more wary of your advances, but you can make a contingent offer which specifies how long you need to make good on your offer, and protects you from having to take on two mortgages at once. You’ll need to show a vendor you’re serious by putting your current home on the market, preferably before you make an offer on a new property. The sooner your existing home’s under offer, the more seriously your own offer will be taken.

Should you avoid a chain when buying and selling a house?

Operating without a chain is the most desirable way to buy and sell, however it’s often unavoidable. You should try to minimise your chain as much as you can though. A long chain that depends on a large number of sales going through is more likely to break down, compared to one which only has a few people in it.

Find out more about what being chain free means and the benefits.

Do you need a deposit when buying and selling a house?

Every house purchase requires a deposit at exchange. If you’re selling your home, your buyer’s deposit usually covers this. If it doesn’t, you may have to come up with some extra cash for a deposit, but your conveyancer can advise you on this.

What are the potential costs involved in selling and buying a house at the same time?

Here's a thorough breakdown of the potential costs you might encounter during the process.

1. Mortgage fees

Mortgage portability fees: If you’re still within the initial term of your mortgage, check if your mortgage is portable. If it is, you might face a small fee to transfer it to your new property.

Early repayment charges: If your mortgage isn’t portable, you’ll need to settle it when you sell. Many mortgages charge a percentage fee for early repayment, which can be substantial, especially if your property is in negative equity.

2. Estate agent fees

Traditional estate agents typically charge between 0.5% and 3% of your sale price, which you will need to factor in to your buying budget.

3. Energy Performance Certificate (EPC)

An EPC is mandatory when selling a house, providing a measure of your home's energy efficiency. Obtaining this certificate usually costs around £75. While you can request it through your estate agent, comparing online prices might yield better deals.

4. Conveyancing fees

Both selling and buying properties requires conveyancing—legal work done by solicitors. Fees can vary based on your property’s status, from your mortgage status, or whether your property is freehold or leasehold.

For a more accurate idea of what the conveyancing fees could be for your move, get a quote.

5. Stamp duty

As a homeowner, it’s likely you’ll need to pay Stamp Duty Land Tax (SDLT) on your new property. The exact amount depends on the property’s purchase price, use our stamp duty calculator to work out how much you’ll have to pay.

If your new purchase completes before the sale of your existing home, you may need to pay an additional 3% on top of your expected stamp duty costs. However, you should be able to reclaim this if you sell your previous property within 36 months.

Find out more about stamp duty rates.

6. Removal costs

Unless you have personal transportation or help, hiring a removal service is necessary. Removal costs depend on the number of rooms, the quantity of goods and the distance between properties.

Charges can vary widely from £100s to over £1000s. To get an idea about what removals my cost for you, our removals partner, AnyVan, will be able to provide you with a quote for your move.

How long do you have to reinvest money from the sale of a house?

Your home is classed as a capital asset, and when you sell it for profit, it may be subject to Capital Gains Tax. Generally, you can own two properties for 18 months before you have to pay tax. However, there are some exemptions, where you might not need to pay Capital Gains, in which case there is no time restriction on reinvesting the money from selling your home.

If you are concerned, you should seek the advice of a tax specialist as soon as possible.

What happens to my mortgage if I buy and sell at the same time?

It is usually possible to transfer your mortgage from one property to another, this is called porting your mortgage. It can be a good way of retaining a strong interest rate and avoiding an early repayment charge when you buy a new home.

However, it's important to note that not all mortgages are portable, and even if they are, portability is not guaranteed. Your lender will need to reassess your affordability and the new property's value, which could influence their decision.

In cases where your mortgage cannot be transferred:

If you want to borrow more money, you’ll have to apply for the extra funds separately and blend the two rates together. These additional funds will often have different rates, and you might find yourself needing to blend the two rates together to form your new mortgage terms.

Should I get a mortgage advisor?

Knowing how to handle buying and selling a home at the same time isn’t the easiest thing in the world. If you’re feeling overwhelmed or just want another professional in your corner during the process, it could be a good idea to get a mortgage or financial advisor on board. Advisors can help you navigate the things you need to do, choosing a reputable conveyancer is also crucial to help with this.

What are the potential problems when buying and selling at the same time?

When you're caught in a property chain, several issues can arise that could complicate the process:

How can you plan for a house sale falling through?

Whether you buyer discovers something wrong with a property, something goes awry on the mortgage front or the seller’s personal circumstances change, there are lots of reasons why house sales fall through. It can be upsetting and costly, but there are ways to protect yourself, whether you’re buying or selling. From comprehensive surveys to minimising the size of your chain, being open to compromise on relatively minor issues and ensuring your finances are in great shape for your mortgage.

Here at My Home Move Conveyancing, if your purchase falls through through no fault of your own, we will honour your searches for up to three months, so that you have time to find a new home.

Read more about how to protect yourself in our guide to gazumping, gazanging and gazundering.

How do I determine and set a completion date when selling and buying a house?

Setting a completion date when involved in a property transaction can be a bit complex, especially if you're navigating a house chain. However, with careful planning and proactive communication, you can establish a realistic timeline that works for all parties involved.

1. Understand your position in the chain: Firstly, identify your position in the buying and selling chain. If there are multiple transactions linked, the timelines for offers and bids on your own property can influence the overall completion date. It’s essential to keep open lines of communication with all parties to synchronize schedules.

2. Collaborate with your conveyancer: Your conveyancing solicitor will play a pivotal role in the administrative process. They will handle the exchange of contracts and other crucial paperwork. Regularly check in with your solicitor to ensure everything is progressing as planned and to avoid any unexpected delays.

3. Set clear deadlines: Work with your estate agent and solicitor to set clear, achievable deadlines. This includes agreeing on dates for the exchange of contracts and the final completion. Be prepared to negotiate these dates with the other parties in the chain to accommodate everyone’s needs.

4. Monitor and adjust: Once you’ve set a provisional completion date, keep monitoring the situation. Stay flexible and ready to adjust if any unforeseen issues arise, like delays in mortgage approval or survey results.