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6 Mistakes to Avoid When Trading Up to a Larger Home |
Unlike the experience of buying a first home,
when you're looking to move-up, and already own a home, there are
certain factors that can complicate the situation. It's very
important for you to consider these issues before you list your home
for sale.
Not only is there the issue of financing to consider, but you also
have to sell your present home at exactly 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. |
Six Mistakes |
In this report, we outline the six most common
mistakes homeowners make 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. |
Mistake 1: 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 bank accounts. 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 house hunting when
there's a much easier way of going about the process. For example,
find out if your agent offers a Buyer Profile System or
House-hunting Service, which takes the guesswork away and helps to
put you in the home of your dreams. This type of program will
cross-match your criteria with ALL avail-able homes on the market
and sup-ply you with printed information on an on-going basis. A
program like this helps homeowners take off their rose-colored
glasses and, affordably, move into the home of their dreams. |
Mistake 2: Failing to make necessary
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 in a prospective buyer's eyes. These fix-ups don't 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. |
Mistake 3: Not selling first |
You should plan to sell before you buy. 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. Better still, find a way to eliminate this situation
altogether by getting your agent to guarantee the sale of your
present home (see point number 5 below). |
Mistake 4: Failing to get a pre-approved
mortgage |
Pre-approval is a very simple process that many
homeowners fail to take advantage of. 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 you
already have the green light from your lending institution. With a
pre-approved mortgage, your offer will be viewed far more favorably
by a seller - some-times even if it's a little lower than another
offer that's contingent on financing. Don't fail to take this
important step. |
Mistake 5: Getting caught in the Real Estate
Catch 22 |
Your biggest dilemma when buying and selling is
deciding which to do first. Point number 3 above advises you to sell
first. However there are ways to eliminate this dilemma altogether.
Some agents offer a Guaranteed Sale Trade-Up Program that actually
takes the problem away from you entirely by guaranteeing the sale of
your present home before you take possession of your next one. If
you find a home you wish to purchase and have not sold your current
home yet, they will buy your home from you themselves so you can
make your move free of stress and worry. |
Mistake 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 go up dramatically. To avoid a logistical nightmare
ensure you work closely with your agent. |