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  • Writer's pictureAaron Lin

Ask Aaron Now: Should I Buy Or Sell First When Upgrading Or Downgrading?

Summary

Selling first allows you to plan your next purchase decision with greater certainty since you already have the proceeds to make the purchase.


Buying first involves higher risks such as having to pay the ABSD for condos or having to sell your HDB within 6 months.


Buying first also means that you have to fork out money from your OA or bank account since you cannot tap on the proceeds from your old property.

Article

Most Singaporeans want to buy first since they are concerned that they cannot find an ideal place to stay if they sell first. However, if you choose to buy first, your number one risk is the scenario where you cannot find anyone to sell your old property to. If you are buying a condo, you have to pay the ABSD. If you are buying an HDB flat, you will have to sell your HDB within 6 months. The price you get might end up being lower than the price you wanted to sell at.


Many are looking to use the proceeds from their old property to purchase a new one. If you buy first, you will need to fork out money from your own OA account or bank account first.


Personally, I recommend selling first then buying later. While you may not be able to find a place you like, I believe that it will be more stressful to be unable to sell your property at an ideal price. Buying first imposes a lot of financial limits since you are unable to tap on the proceedings from your old property.


By selling first, you will eliminate the stress of finding a buyer for your old property. You will also know how much is available to buy a new property. With these certainties, you will have ample time to find a house that you like. If you are unable to find such a house, you can simply rent a house.


Many HDB buyers are going around looking at houses even though they have not sold their place. However, they usually are not ready to sell their house to purchase a new property even after they have identified the house they want. This is why following the correct process and plan is absolutely essential.




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