Tips For Selling Your Current Home To Buy a New One
Are you considering selling your current home as the means to purchase a new one, or moving up, as some call it? If so, read on. These tips might be helpful to you.
It’s a good idea for folks who do have to sell to buy to start looking right after they have listed their home, or even before listing their home. It typically takes anywhere from three months to six months for a home to sell in the current market, or perhaps even a year if it’s priced at $1 million or more. If someone has looked for a new home during the time their current home is on the market, once their home is under contract for purchase it makes it easier for them to find one they like more easily in an area they like, that way they don’t have to rush in a panic.
Here are tips you can use for when you need to sell your current home to buy a new one:
1. Select the new home
Start looking in areas where you may want to buy your next home before putting your current home on the market. This will help you to get to know several areas and help you decide whether or not you would like to actually live there.
Do not wait until the last minute to search for your new home. Even before your home is listed for sale, it’s a good idea to have your realtor show you homes in certain areas.
The benefits of selecting your new home before selling the old one are as follows:
- You would have an understanding of the budget required to buy your new home.
- Getting familiar with the new location would be another advantage.
- Based on the investment budget you can plan the selling price, loans, and mortgages.
- Get to know the monthly expenses of the new house, which helps you handle your income the right way.
- Understand the amenities provided at the new location and compare them with the other properties.
- Save time and money.
- Avoid price fluctuations between the time of selling and buying of the property.
- This would lower your stress of handling finances and also help you make no or fewer mistakes.
2. Consult with your realtor
Talk with your Realtor about your goals and see if they’re real. After all, you may not be able to get what you need from selling your current home to buy your next home, and you need to know that before putting your current home on the market.
However, staging your current home can help you get a faster deal, I suggest following these tips:
- Declutter. Rent a storage unit and move out excess or bulky furniture; unload kitchen and pantry shelves; empty closets so that they’re only about half full; box up the stereo system, and clear out the garage so that it can hold a car again.
- Depersonalize. You love your family photos, mantle piece thimble collection, and bowling trophies. Buyers probably won’t. Store your personal keepsakes until the home sells. Hide your toiletries, too, except for things like decorative soap.
- Neutralize loud colors. Purple shag carpet doesn’t sell. Nor does the pink fairy wallpaper in your daughter’s room. Studies show buyers prefer warm but neutral colors like beige.
- Clean and deodorize. Goes without saying, you might think. Guess again. Stagers have to remind people to vacuum corner cobwebs, scour the grout, de-grease the garage and steam clean carpets.
- Let there be Light. Increase wattage on light bulbs in darker rooms and remove screens if it helps brighten things.
- Curb appeal counts. No one will tour a house if it looks shabby outside. Weed the flower beds; trim the shrubs; mow the lawn and edge the sidewalks. Clean dirty siding and stucco. Retire the dented mailbox.
While staging can help you to attract more interest in your home from potential buyers, it is not the be all end all solution to selling it. Serious sellers will also need to price it right, and they will need a Realtor to market it for them.
3. Sell your current home
List your home for sale with a Realtor you know and trust. Your Realtor can help you sell your home while simultaneously finding a new home. Do not go with the one who offers to list it for the highest price, as this can often keep it sitting longer on the market.
In order to sell your home faster in a buyers market follow these guidelines:
- Find the right agent at the beginning of the process. Ask the agents to do a comparative marketing analysis (CMA) and to list the marketing strategies they will employ while selling your home. These could include open houses (see below) or sending out mailings, such as flyers or postcards. You may also have to pay a little more in commission.
- Give a bonus to the agent who brings the buyer to the closing table. While a great agent isn’t going to force a buyer to purchase a house just to get a cash bonus, he or she probably will include your house as an option as long as it meets the buyer’s criteria. Other options include big gift certificates, family vacations, or, if you’re trying to sell a very expensive house, you might consider giving away a fancy car.
- Let your neighbors know your house is for sale. Make sure to drop a complete listing sheet into your neighbors’ mailboxes. If your neighbors like the neighborhood, they’ll be more likely to recommend your house to friends and relatives who are shopping around for a new home. Want to goose your return? Offer a gift certificate to any neighbor who recommends the person who ultimately buys your house.
- Take advantage of technology. Make sure the agent you choose has a Web site (personal or company) that can accept multiple photos of your property. You can even set up your own Web site so that anyone searching the Web for the property with your home’s amenities or in the neighborhood will find it. Consider paying someone to take a 360-degree photo, as well as extra photos of the interior and exterior of the property. More than 85 percent of buyers start their search for a home on the Internet, which means you’ve got to “wow” them online or they’ll never even look at your house in person.
- Give your landscape an upgrade. Spending $500 to have your yard professionally overhauled will pay off big-time now that summer has come. Have a professional landscaping company trim bushes and trees, manicured lawns, plant colorful flowers, and de-weed the garden. Exterior rooms are popular, so consider buying new, matching lawn furniture and a movable fireplace pit to encourage buyers to think about spending their evenings under the starry skies in your backyard. This will help to give your home a good buzz throughout the neighborhood.
- Ask your agent to do evening and morning open houses. Everyone works. Everyone is busy all the time, and if you have kids, weekends can be a tough time to look for a home. In some parts of the country, early-morning “breakfast” open houses are becoming popular, as are the evening “cocktail hour” open houses. Broker opens still work to get the word out in the brokerage community. You might try boosting attendance by giving away a $100 gift certificate at the broker’s open (you can draw their business cards from a fishbowl).
- Make the most of a by-owner sale. FSBOs (those homes that are “for sale by owner”) tend to do really well in seller’s markets. It can be tougher in a buyer’s market. Be sure your ads say you will cooperate with a buyer’s agent — that is, you will pay a half commission to the agent who brings the winning offer.
If you’re looking for tips on how to successfully sell your current home to move up and buy another home, I shared those tips here. While you’re reading all these tips, you may as well find out some of the biggest mistakes that home and condo sellers make.
4. Make an offer
Once you find the home you want to buy, discuss making an offer on it with your Realtor. Making your offer contingent upon the sale of your current home is the most common method of doing this, and while this isn’t a popular method to use in a hot market, it is very common in normal and slower markets. The market is normal at the moment, and I recently negotiated one of these contingency offers for clients of mine.
Keep these key factors in mind when and before making an offer:
- Contact the listing agent of the new property and check if they have other buyer offers. I strongly recommend working with your realtor as they would know the market and contact the listing agent also extract all the required information for you.
- When you make an offer ensure it is contingent on the sale of your old home as this would avoid any stress or financial liability in the future.
- Avoid competing with other buyers. If your realtor tells you that the listing agent has better or higher offers for the new home then this can be trouble for you. You can avoid this situation such as directly contacting the seller and discussing your offer with them using personalization.
5. Talk to lenders
I don’t advise bridge loans if you can work out the contingent on the sale of home contingency, and if you have a good realtor it’s usually not a problem to negotiate this clause into the purchase contract. If you are moving up and using the equity in your current residence to do so, you may need a mortgage of some sort to buy the new home with, especially if it’s pricier. Talk with your lender about what type of loan would best suit your needs and financial situation.
There are a couple of reasons you should be completely clear about the mortgage or loan required to complete the purchase of your new house. here are some of the reasons:
- You can avoid putting a down payment and getting your money stuck to later realize that the new home is out of your budget.
- Mortgage offers can be different and change every time, therefore, be sure to collect multiple mortgage offers and keep your options open.
- Show the seller that you can complete the purchase immediately without wasting their time. A pre-approved loan helps you create that seriousness in the deal and a seller appreciates such buyers.
- Talk to your lender about additional fees involved with your mortgage and loan as every loan would have an additional fee associated with it, thus making these hidden fees clear would help you get a clear picture of the total investment.
- Start your loan application process as soon as possible as there are a lot of rules and regulations to be followed in order to get the application process approved. Avoiding mortgage complications helps you close the deal faster and also avoids the seller from backing out.