More people are downsizing their lives than ever — and that could mean really good news for anyone who’s inclined to move in the other direction pertaining to the roof over their head. Whether you anticipate your family growing, facing the reality of bringing an elderly parent into your house or are just ready to move to something a little nicer and roomier — it can be a good time for a home upgrade.
Just make sure you take a couple of precautions.
Shop around — eventually
The biggest mistake most people make when trading up is getting too excited about buying a new house — which can lead to falling in love with one and buying it before you’ve sold your existing home.
Experts universally agree: Sell your home first. And that means don’t really start shopping until you’re approaching a close.
Don’t worry, there will be lots of places on the market for you. Consider that in 2010, just 21 percent of homebuyers were downsizing, per the National Association of Realtors. Five years later, 31 percent were downsizing.
This means good news on both ends for the upsizer:
- There’s a bigger market for your smaller house.
- There are more larger houses on the market, potentially at better prices.
It takes patience to wait for your house to sell when your mind is alight with the possibilities of a new, roomier, nice place. Shopping is the fun part, right? But stifling that urge is key. The NAR’s Profile of Home Buyers and Sellers reports that most buyers shop for 10 weeks and will look at 10 homes before pulling the trigger. But it’s important to sit tight so that you’re not pressured to take an offer that’s too low.
And don’t worry, there are plenty of people after your smaller home, between the downsizers and the first-time buyers (whose ranks are slowly growing again, making up 35 percent of the home-buying market, up from 32 percent last year).
Is your home priced right?
The tendency is for sellers to try to squeeze every possible dollar out of your sale, therefore, pushing the edge on your asking price. That’s not a bad instinct and will give you more purchasing power on the upgrade. But the best way to maximize your sale is to keep the asking price down.
Ok – let me rephrase. It’s critical to make sure your asking price is in line with the market. Money magazine explains it this way: “As a trade-up buyer, you’ll need flexibility as well as a high price, so your primary goal should be to draw multiple bids — which in turn will give you more room to negotiate your exit.”
When it comes time to shop, remember:
- Go ahead and get pre-approved for a mortgage. You can do this while you’re waiting to sell. It’s free, and you’ll know just how big your war chest is when it’s time to shop.
- Be flexible on location for the best deal. There may be an amazing home on a busier street or one that is close to the train line, and the price-per-square-foot is lower than other areas. Be open to the possibilities.
- Use an agent to ensure you see a good portfolio of new homes. You can miss a great deal if you’re just doing hit-or-miss internet searches or classifieds.
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