Moving On Up: Four Ways Move-Up Buyers Can Breathe a Little Easier this Spring

Although Mother Nature doesn’t always like to show it this time of year, spring is surely inching closer, which may have many current homeowners feeling something like cabin fever; could it be time to list your current home and search for a new one?

Homeowners might be taking a look at their home equity and considering upgrading to a larger, newer or more conveniently-located home. But, along with that possible move comes many questions, like “What will I do if I sell my home first and don’t have another to move in to?” or “If I buy a new home before I sell mine, will I have to pay two mortgages at once?”

While juggling the sale of one home and the purchase of another can be tricky, it is a reality for many buyers, particularly those who are considering a move-up home purchase. The good news is that there are ways to make the move-up process just a little smoother.

Here are a few things that move-up buyers can do to ease both their selling and buying processes:

1. Get Familiar with the Market

This tip probably goes without saying for move-up buyers. The chances are good that if you have been considering upgrading to a new home, you’ve probably already spent hours scouring the market for the perfect neighborhood, new constructions or larger homes.

If that is the case, you’ve probably noticed whether or not the market in your area currently seems to favor buyers or sellers. If it favors buyers, you likely will have an easier time finding a great deal on that new home before you settle on selling yours. In a seller’s market, you may be able to easily sell your home before you’re able to buy a new one.

2. Consider All Options

Despite market conditions, it is rather unlikely that move-up buyers will close on the sale of one home and the purchase of another on the very same day. So, that leaves two scenarios: either you sell your home first or you buy your new home first. But, what does it all mean?

If you sell your current home before buying a new one, one obvious perk is that you will have additional money for a down payment. There also may be an agreement that you can strike up with your buyer to allow you more time in your home while you find and close on a new one. Of course, you can also find other living arrangements, either with family, friends or at an extended-stay hotel. Keep in mind, that option may take an additional amount of patience on both your part and the part of your potential hosts.

In the case that you buy a new home before selling your current home, an immediate caution sign emerges when you consider that you may be carrying two mortgage payments until you can sell your home. If this is an issue for you, consider renting your home to cover the additional costs. For additional down payment money on your new home, you may be able to take out a home equity line of credit that you can pay off once you sell your current home.

3. Take Command of Your Finances

Just the thought of upgrading your home is exciting; so, it can be hard not to get carried away when a lender tells you that you can afford X amount on a new home. Try to keep things in perspective about a new mortgage payment by factoring in all of your other current debts and any short and long term savings goals that you have.

As a move-up buyer, you should also know that understanding your finances means being realistic about your potential earnings on the sale of your current home. While the offer price may sound like an excellent lump sum of money in the bank, don’t forget to include all of the additional costs of closing and moving.

Finally, when it comes to your financial picture as you’re looking to move up to a new home, go to a lender and get pre-approved. Not only will you feel more confident as you search for a home, it will also put you in a better position when you are ready to make an offer.

4. Make it Personal

There is obviously a personal reason that you are seeking out a new home; so, keep that in mind while you’re searching for the one you want to spend the next number of years in. If your current home only has a two-car garage and you often feel like you need more space there, hold out until you find a home that fills that void.

There is a definite difference between your needs and wants as a buyer, but the fact that you already own a home and currently are doing without some of your wants might allow you to be just a little picky before you make the final decision to move up.

In the end, both buying and selling a home are huge decisions… and move-up buyers make the decision to do both at once; so, kudos to any move-up buyer who chooses the always exciting and sometimes stressful undertaking.

For reliable help in pursuing your next home sale or purchase, contact an experienced Prudential Preferred Realty agent today.