Trading Up

Moving On Up

You purchased your home a few years back and now things have changed in your life. Maybe your family has grown, maybe you’ve become an empty nester or maybe you simply want to move into a different neighborhood. Whatever the reason, you are now again in the market for a home.

The first time you bought a home, as complicated as it seemed at the time, it was a straightforward process. You were renting an apartment or living at home. After spending the time needed to find the home you wanted, you applied for your financing, waited for the seller to give you a move out date, you closed on the purchase and moved in. This time around you will need to coordinate two transactions, the purchase of your new home as well as the sale of your current residence.

The advice most commonly given in this situation is to put your home on the market, get a buyer for it and then go into contract for your new home. This approach comes with one serious flaw. You have committed yourself to a timeframe in which to find your new home. In the contract you signed for the sale of your current home, there will be a target date for closing and vacating the home that you must meet. Your requirements for this purchase are going to be more demanding than when you first bought. You are going to be much more particular, and rightfully so. You are looking to improve on what you already own. The time constraint imposed here will make the transition more stressful than necessary and may in fact force you to purchase something that you are not happy with.

I suggest a different approach. Find your new home first before selling your current residence. The risk here is that you may be stuck with two homes, or worse, not be in the financial position to close on the purchase and be in default on the contract. The way to prevent this from happening is by developing a plan of action based on current factual data.

The first thing you need to do is to discuss the feasibility of the transition. Set up an appointment. I will discuss your financial capabilities, credit position and timetable. From this you can move onto the next step, which is to begin your search.

Within a short period of time you should have a good feel for what your new home will cost. You will have pricing based on today’s market. This not only gives you pricing on what you a looking to buy but gives you an idea of what your current home will sell for in today’s market. Remember, it doesn’t matter what you think your home is worth, you can only sell your home for what the market will bear.

Pride of ownership leads you to believe your home is worth more than it really is. It may in fact be worth more to you than to the marketplace, but you’re not the buyer, you’re the seller. You must be objective when you set your asking price. Your search for a new home will guide you in pricing your current residence.

When you bought your first home, your search began to narrow as it progressed. The style of house, location, etc. became more focused. This will again happen. As you fine tune your search, you can begin to market your home. With your new knowledge of pricing you will price your home realistically. Marketing time will be reduced because the home is now priced right, something you could not have done prior to this time. The risk factor of owning two homes has been substantially reduced.

By staying in touch with me during this process you will reduce your risk factor even further. I will to keep you up to date regarding the interest rate environment. I will be able to assist you in structuring your offer when you begin negotiations. I can even help you in negotiating the sale of your home.

Moving on up should be a pleasurable experience. With my help it will be. Give me a call so we can discuss your transition in more detail.