When you are planning to sell your property while looking to buy a new one, it is essential to follow a series of key steps to ensure the success of these simultaneous transactions. In this article, we’ll take you through the various steps to consider in order to successfully complete these complex transactions.
Before putting your property up for sale, have its value assessed by a real estate agent to set a realistic price.
Establish your actual budget for the new property. Start searching for a new real estate property that meets your needs and fits within your budget. Take into account criteria such as location, size, nearby amenities, etc.
Evaluate your financing options for purchasing the new property. If you need a mortgage, consult different banks to compare offers and interest rates. If you have an existing mortgage on your current property, what do you still need to pay? What are the terms for transferring the mortgage to a newly purchased property?
Carefully plan the timelines between the sale of your current property and the purchase of the new one. Make sure you have enough time to find a new property and complete all necessary administrative procedures. Inform your real estate agent that you need to remain in your current property for a period of X amount of time.
Your real estate agent and notary will play a key role in drafting contracts (sales agreement, then deed of sale), verifying documents, and coordinating payments.
Before selling your property, identify any potential problems or necessary repairs with your real estate agent. This will allow you to adjust the selling price accordingly or take action to resolve these issues before the sale.
Plan your move to minimize disruptions. Arrange for the transport of your belongings and make sure to consider the key handover timelines between the sale and purchase of the new property.
In Belgium, when a person wants to buy a new property before selling their current property, they can use a bridge loan, also known as a relais loan or transition loan. It is a temporary loan that allows financing the purchase of the new property while waiting for the sale of the existing property. Here are some points to consider regarding the bridge loan:
Advantages: The bridge loan can offer certain advantages, such as allowing you to buy the new property quickly without having to wait for the sale of the current property. This can help you avoid the need to find temporary accommodation or miss out on an interesting buying opportunity. The bridge loan can also give you some flexibility in price negotiations for the new property.
Costs
It is important to note that the bridge loan generally comes with fees and higher interest rates than traditional mortgages. It can be a convenient solution, but it is essential to understand the associated costs and assess if you can handle the additional payments.
Risks
The main risk of the bridge loan is that if the sale of your existing property takes longer than expected, you could end up having to repay the bridge loan for an extended period. This can increase your financial burden and put additional pressure on your budget. It is crucial, therefore, to carefully evaluate the real estate market, sales timelines, and be prepared for potential delays.
Conditions and Repayment
The conditions and repayment terms of the bridge loan may vary from one financial institution to another. Make sure to understand the terms of the loan, including the duration, installments, interest, and options for early repayment. It can be helpful to consult different banks or financial institutions to compare offers and find the best solution for your needs.
It is essential to consider these aspects and carefully assess your financial situation before deciding to use a bridge loan. It is recommended to consult a financial advisor or mortgage specialist to obtain personalized advice and evaluate if this option fits your specific situation.
When you sell your real estate property, it is possible to agree on a clause allowing temporary occupancy by the seller after the signing of the authentic deed. This clause allows the seller to remain on the property for a specified period to facilitate their transition to a new home. In this section, we will explain the fundamental principles of this precarious occupancy.
The transfer of ownership will take place on the day of the signing of the authentic deed. However, the seller will continue to occupy the property for a maximum period of X months from the date of signing. During this period, the seller will pay a monthly fee of X euros in exchange for this occupancy.
It is essential to emphasize that the seller commits to occupy the property as a diligent father and that only the seller and their family will have the right to reside there. The seller cannot assign this right of occupancy to anyone else. Additionally, the seller must take out comprehensive insurance of the “occupant” type and maintain it until the end of the agreed occupancy period.
It is also important to note that all furniture and personal items of the seller that are not part of the sale must be removed by the seller, and the property must be returned in a clean state on the agreed date for vacating the premises.
In conclusion, the clause of temporary occupancy by the seller after the signing of the authentic deed allows for a transition period for the seller before permanently leaving the sold property. However, it is essential to respect the commitments and conditions agreed between the parties to avoid any disputes or inconveniences.
It is always recommended to consult professionals such as real estate agents to organize the simultaneous sale and purchase of a new property. In Belgium, 35% of real estate sellers are also buyers of a new property. At Trevi, for 43 years, we have been involved in such situations.
