Unlike the experience of buying a first home, when you’re looking to move up, and already own a home, there are many factors that can complicate your situation.
Not only is there the issue of financing to consider, but you also have to sell your present home at the right time in order to avoid either the financial burden of owning two homes or, just as bad, the dilemma of having no place to live during the gap between closings.
In this blog, I outline the six most common mistakes that homeowners have made when moving to a larger home. Knowledge of these
six mistakes, and the strategies to overcome them, will help you make informed choices before you put your existing home on the market.
Keep these six points in mind. Proper pricing is always the key to selling any home.
Avoid these common mistakes:-
1. Looking though rose-colored glasses.
Most of us dream of improving our lifestyle and moving to a larger home. The problem is that there's sometimes a discrepancy between our hearts and our wallets. You drive by a home that you fall in love with only to find that it's already sold or that it’s more than what you are willing to pay. Most homeowners get caught in this hit or miss strategy of home searching when
there's a much easier way of going about it. For example, find an agent or a system that will put you in the home that fits your needs and wants. This help to cross-matches your criteria with ALL available homes that are on the market. Also,This helps homeowners take off their rose-colored glasses and, affordably, move into the perfect home.
2. Failing to make necessary repairs and improvements.
If you want to get the best price for the home you're selling, there will certainly be things you can do to enhance it and make it more desirable. These repairs and improvements do not necessarily have to be expensive. But even if you do have to make a minor investment, it will often come back to you ten-fold in the price you are able to get when you sell. It's very important that these improvements be made before you put your home on the market. If cash is tight, investigate an equity loan that you can repay on closing.
3. Not selling your existing home first.
I always recommend selling before you buy your next home. This way you will not find yourself at a disadvantage at the negotiating table, feeling pressured to accept an offer that is below-market value because you have to meet a purchase deadline. If you've already sold your home, you can buy your next one with no strings attached.
If you do get a tempting offer on your home but haven't made significant headway on finding your next home, you might want to put in a contingency clause in the sale contract which gives you a reasonable time to find a home to buy. If the market is slow and you find your home is not selling as quickly as you anticipated, another option could be renting your home and
putting it up on the market later - particularly if you are selling a smaller, starter home. You'll have to investigate the tax rules if you choose this latter option. But, if your home is priced right, you should have no problem selling it regardless of the level of market activity.
4. Failing to get a mortgage pre-approval.
Pre-approval is a very simple process that many homeowners fail to
do first. While it doesn't cost or obligate you to anything, pre-approval gives you a significant advantage when you put an offer on the home you want to purchase because you know exactly how much house you can afford, and it’s saves time when you’re ready to make your move. With a pre-approved mortgage, your offer will be viewed far more favorably by a seller - sometimes even if it's a little lower than another offer that's contingent on financing. Don't fail to take this important step.
5. You already found your ideal home, what to do now?
Your biggest dilemma when buying and selling is deciding which to do first. You don't want to end up with the terrible situation of owning two houses, or worse, owning none! Point number 3 above advises you to sell first, but what if you found the ideal home before your house has sold and you want to write an offer NOW? Simply, write the offer contingent upon the sale of your existing home.
6. Failing to coordinate closings.
With two major transactions to coordinate -- together with all the people involved such as mortgage experts, appraisers, lawyers, loan officers, title company representatives, home inspectors or pest inspectors -- the chances of mix-ups and miscommunication increase dramatically. To avoid a logistical
nightmare, ensure you work closely with your agent.
Keep these six points in mind when you start looking for a new
home. They'll make your life easier, and will save you a lot of money.
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