6 mistakes to avoid when trading up to a larger home
6 trade-up mistakes to avoid…. “… you 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.”
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 understand 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.
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.
1. Rose coloured glasses.
Most of us dream of improving our lifestyle and moving to a larger home. The problem is that there is sometimes a discrepancy between our hearts and our bank accounts.
Most homeowners use a hit and miss strategy to house hunting when there is a much easier way of going about the process.
For example, we have a unique program called the “33 Point Buyer Care Programme”, which takes the guesswork away and helps to put you in the home of your dreams.
Here’s how part of it works:
If you are not quite ready to commit to moving, but want to keep abreast of the marketplace as it pertains to what and where you might want to live next. Consider getting onto our Weekly MLS hot pics and Market Watch (for investors: Weekly Investor MLS hot pics).
If you have made the decision you want to move then get onto our Daily MLS hot pics programme. You will be made aware of MLS listings you are interested in as they are published on the MLS that Realtors use.
Please note the Realtor MLS is not the same as Realtor.ca the national public marketing service for Realtors. Granted our active listings are uploaded to Realtor.ca but there is a time lag and due to confidentiality no information about conditional contracts etcetera is published.
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 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 in an equity loan that you can repay on closing.
3. Not selling first.
You should plan to sell before you buy. This way you will not find yourself at a disadvantage at the offer 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, you might consider 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.
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’ve already got the green light from your lending institution. With a pre-approved mortgage, your offer will be viewed far more favourably 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. Getting caught in the real estate catch 22.
Your biggest dilemma when buying and selling is which to do first.
Buy then sell? Sell then buy?
6. Failing to co-ordinate closings.
With two such major transactions to co-ordinate, and all the people involved, the chance of mix-ups and miscommunications go up dramatically. There are literally dozens of transactions involved: appraisers, underwriters, lawyers, loan officers, title companies, home inspectors, pest inspectors and so on. We can handle the whole process for you to help you avoid this logistical nightmare.