Moving Up to a Larger Home
When you decide to sell your current home to move up to a larger one, you'll find that there are factors that can complicate the transition. It's important to understand these issues before listing your current home for sale. This experience will be very different from your first home purchase.
Moving day should be exciting, but it can become difficult if you haven't planned well for it. You must consider financing, of course, but you'll also need to sell your present home at the right time to avoid the possibility of paying on two homes you temporarily own! Equally unpleasant is the prospect of having nowhere to live if there is a time lapse between the closings for the home you sold and the one you just purchased.
This article alerts you to the six most common mistakes made by homeowners when they move to larger homes. Being aware of them and knowing how to overcome them will enable you to make good decisions before you list down your existing home for sale.
We all dream, at one time or another, of improving our lifestyles and moving to larger homes. But there can be conflicts between what our hearts want and what our bank accounts will permit.
You may have driven by and fallen in love with a home that's for sale. When you call the agent, you learn it has just been sold, or you find out that it's priced higher that what you're willing or able to pay. Home buyers frequently find themselves in this situation, but there is a much easier way to find a home you love at a price within your budget.
Ask your agent if he or she offers a Buyer Profile System or House-hunting Service. This can eliminate guesswork and help you find the home of your dreams by cross-matching your requirements with all of the available homes on the market. It provides current printed information throughout your search, and helps home buyers achieve their dreams and move into a home they love and can afford.
Invest whatever you need to on home improvements before listing your home
To get the best possible price for the home you want to sell, do whatever is necessary to appeal to prospective buyers' eyes. Fix-ups don't necessarily have to cost a lot, but every small investment you make on repairs or enhancements often will come back to you several times over as a higher sale price.
Improvements always should be made before listing your home for sale. If cash is tight, think about an equity loan that can be repaid on closing.
Sell first and then buy
Always plan to sell first, and then buy, to keep from finding yourself at a disadvantage at the negotiating table, feeling pressure to take a below-market-value offer to be able to meet a purchase deadline on your new home. Once you've sold your home, you'll be ready to buy a new one with no strings attached.
If you get a good offer on your home before finding a new one, think about adding a contingency clause to the sale contract that will allow you to remain in the home for a reasonable time while you find a new home.
If the real estate market is slow and your home isn't selling as quickly as you hoped it would, consider renting it out and putting it on the market later, especially if you are selling a smaller, starter home. Be sure to check tax rules if you decide to rent your home. The best idea: eliminate the problem altogether by asking your agent to guarantee the sale of your present home.
Start by getting a pre-approved mortgage
Many homeowners fail to take advantage of pre-approved mortgages. It's a simple process that doesn't cost you anything or obligate you in any way, but does give you a significant advantage when you make an offer on a home: you know exactly how much you can afford to spend, and already have the green light from your lending institution. And your offer will be viewed more favorably by the seller-even if it isn't the highest offer-since you're already approved for a loan, while another prospective buyer may need to make an offer contingent on finding financing. Be sure to take this very important step. You won't be sorry you did.
Avoid the Real Estate Catch 22
An important choice you have to make when buying and selling is determining which to do first. We told you, in number 3 above, that you should sell first. However, you may be able to eliminate this dilemma completely.
To make sure that closings go smoothly and don't become nightmares, work closely with your agent to ensure that communications with all the players are current and correct. You will be conducting two major transactions that require coordinating everyone involved: mortgage experts, appraisers, lawyers, loan officers, title company representatives, home inspectors, and pest inspectors. The risk of mix-ups and miscommunication is high, but can be minimized by keeping the lines of communication open to all participants.
Attention to the tips we have provided in this report will help you simplify the process of moving up to a larger home by making you aware of potential road blocks so that you can deal with them in advance.
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