Before you list your current home for sale there are some issues that you should consider. Chances are that when you bought your first home you were moving from an apartment or family and all you had to consider was getting in or out at the first of the month. There are much larger issues to consider when moving up to another home. Some of these issues are financial such as juggling two mortgages while waiting for your former home to sell. Maybe you won’t have the luxury of qualifying for two mortgages and you will be forced to cancel escrow on the move up property. Possession issues arise if your former home closes escrow before your move up property is vacated. What happens if the sellers of the move up property are counting on your timely performance in closing escrow so that they can purchase their move up property and your buyer is delayed?
There are many scenarios to be aware of when contemplating the purchase of a move up property. In order to avoid the more obvious mistakes, we have provided the top obstacles to avoid below:
Top 5 Mistakes to Avoid When Moving Up To a Larger Home
1. Attempt to Find the Ideal Property Without Using a Licensed Realtor.
Most of us want to improve our lifestyles and move to a more spacious or luxurious home. The problem is that sometimes it is not realistic given our current financial situation: college funds, retirement savings, aging parents, unexpected property taxes and many other complications. If you are searching for a home through local advertising or driving by a real estate sign, you may be disappointed that the home is already sold or out of your price range. Find out if your agent offers an exclusive buyer search program or other house hunting system that can cross match your needs and price range with what is available on the market. This approach can cut down on precious time that you can’t afford. Hire a Realtor to perform their job so that you can perform yours.
2. Ignoring Repairs and Improvements to Prepare Your Home for Sale
Many homeowners have put off necessary repairs and improvements year after year as they go about their daily lives with the attitude that they will get to them someday. Today is the day! If you plan to sell your property for the highest possible resale value, you need to take inventory of all the repairs needed before you list you home. Speak to your agent and ask for a list of recommended repairs and improvements to ensure you are well prepared. Contact Move Up Properties for a complete list of items buyers consider “deal breakers” and avoid losing top dollar in the sale of your home.
3. Not Securing a Buyer for Your Home Before Purchasing Your Move Up Property
In nearly all cases, it is best to sell before you purchase your move up property. Having your former home sold or in escrow at the time you make an offer on your move up property provides you with the ability to negotiate a better purchase price, acceptable terms and have your offer considered before the rest. If you place the “cart before the horse” by falling in love with a move up property before you have your former home in escrow, you could be forced to negotiate from a position of desperation. Remember that you want to buy low and sell high, not the other way around. Put together a back-up plan in the event your former home does not sell as planned such as placing a contingency agreement into your purchase offer. This will provide you with the ability to opt out of the purchase agreement, if necessary while protecting your good faith deposit. Other options include renting your former home, performing a lease to own contract, obtaining bridge financing as a short term measure to cover your purchase with the understanding that your former home will be sold very soon.
4. Failing to Get Mortgage Approval
Sometimes homeowners who already own a home and are looking to move up fail to see the importance of getting a mortgage pre-approval. Mistakenly, they assume because they have an existing mortgage that they will have no problem getting another. It is always wise to sit down with a home mortgage lender as your first step in the move up process. Provide your lender with updated income information, list of your assets and liabilities, pay stubs, 2-years income tax returns and other relevant financing information to determine your maximum purchase price. Offers you make should be complete with a pre-approval from your lender including your credit scores, proof of down payment and a copy of your earnest money deposit. A well prepared offer with all of these items makes your offer more appealing than an offer riddled with various financial or sale contingencies.
5. Choosing your Agent wisely. Almost any agent will show enthusiasm to list your home for sale but choose your agent wisely and base your decision on:
a. Ability to use technology to market your property worldwide to buyers, 24/7.
b. Reviewing with you a comprehensive Marketing Analysis of home sales in your area.
c. Ability to offer a written detailed 30-DAY MARKETING PLAN that will get your house sold at the highest possible price.
d. Be sure that the agent understands the volatile situation you may be exposing yourself to in the event you locate the home of your dreams BEFORE you sell your existing home. Your agent must be prepared to implement safeguards to protect you while providing you with the best chance of completing both transactions concurrently and successfully.
Working with a full-time professional real estate agent is a must. Choose your agent by asking questions of them. Find out how knowledgeable they are about homes currently for sale in your price range as well as a list of properties they have recently sold. Can your agent recommend a reputable lender capable of offering alternatives or suggestions that could mean the difference between successfully moving up to that larger home or not. Don’t be put in the position of “having” to sell at less than optimum values because you don’t want to lose your dream, “move up” property.
Are you ready to sell your current home and move up? If so, contact us today and you will receive a prompt response from one of our full-time, professional Realtors at no risk or obligation.