Selling an existing property and buying another one immediately afterwards involves a few inevitable risk factors, especially if funds are limited. A major concern for most homeowners who are doing this is whether or not they will be able to find the right property to buy immediately after selling the one they are residing in.
Here are a few tips to make the process easier:
1. Sell first and then buy. Put all your energy and resources towards selling your existing property first; getting the right price can take months of negotiation. As soon as you have a couple of offers from potential buyers, start searching for a new property. Don’t procrastinate, because time is money when the property market is in flux.
2. Add the following points to the sales deed after your existing property has been sold:
- A grace period that allows you to stay in your current property for at least three to six months before you have to hand over the property.
- Agree on a payment schedule which allows you to receive 98% of the payment at least 10 days prior to the handover. This will give you the funds to purchase the new property.
3. Prepare to rent. If you can’t find the right property to buy during the specified grace period, be prepared to live in a rental property. This is better than rushing into a deal. You can even ask your buyer if he/she will allow you to rent the current property for a few months.
4. Be prepared. The new property that you buy may require renovations. In this case, ask the seller for permission to begin renovations before the full payment is made. In most cases this requires a 25% down payment.
– Uzma Nawaz
First published in the Real Estate Section of The DAWN National Weekend Advertiser on April 29, 2012.