6 Mistakes to Avoid When Changing Homes
Unlike the experience of buying a first home, when you’re looking to move-up, and already own a home, most people will have to sell their current home before they can buy another so they can use the equity in their first home.
You need to know how much equity you have in your home. RE/MAX Advocates can provide you with a Comparative Market Analysis, so that you know the estimated proceeds from your home. Until your home is actually sold you do not know what your net proceeds will be.
You should also check to see what your mortgage balance is, if there is a payout penalty and if you can take your mortgage with you.
Now is the time to get your real property report with compliance, so we can know if there are any problems with fences, sheds etc. before the buyer signs the contract.
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.
There is a lot to consider when moving from one property to another. You have to know that there will be a home you want after your sell your home. You want to have your home sold to coincide with the possession of your new home.
Mistake 1: Not being realistic
Before you get your heart set on a home that is not in your budget, you should determine your budget. You need to know what your home is worth, how much money you can afford to spend on housing per month. Then we can send you homes that fit. Need 4 bedrooms, we will only send you 4 bedroom homes. Need RV parking? We will only send you homes with RV parking.. Real estate is our full-time profession. We have the tools to make your home hunt easier.
Mistake 2: If it was good enough for me it is good enough for them..
As a realtor one of my least favorite remarks is let the next guy do it! That is fine if you want less for your home. Buyers almost always discount the house more that the actual cost to fix a problem. We can help you with advice on how to prepare your home for sale. We even have a home-stager in-house and accessories to make your home more inviting.
Mistake 3: Not selling first
If your home is already sold when you make an offer on your next home you have a great advantage over someone who has a home to sell. You know how much you will net from the sale of your home, and the possession date you want.
Mistake 4: Failing to get a pre-approved mortgage
Pre-approval is a step that many homeowners fail to take advantage of. 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 approval 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 that has not bothered to get pre-approved. We can arrange for a mortgage broker to visit your home and get your information to get pre-approved. It doesn’t cost or obligate you to anything to have this done for you. It will give you rate protection usually for 30 days, in case the interest rate goes up.
Mistake 5: Getting caught with two homes
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 sellers will accept a subject to my home selling clause. This enables you to put your home on the market, and you are first in line to buy that home. Most of these offers have a 24, 36 or 42 hour clause. This will give you that time limit to remove all conditions on the home you wish to purchase. So before you go out and fall in love with a home, make sure yours is ready to go to market. In the purchase contract in a subject to sale, you will have 24 hours to get your home on the market!
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, representatives, home inspectors or the chances of mix-ups and miscommunication go up dramatically. To avoid a logistical nightmare ensure you work closely with us, your lender and your lawyer. You will need to get a real property report with compliance before the lawyer can close your home. You will also have to make sure you have insurance on both homes to overlap in case something is delayed. Your banker can give you an interim loan so that you can move out over several days after you have possession of your new home.