Purchasing your first home is a special experience but as time goes on families grow and their housing needs evolve. A change of neighborhood, needing more rooms for your children, or just more storage – whatever the reason, trading up to a larger home is on the mind of many families. With the current housing market stabilizing, this is a prime opportunity to trade up to a house that better fits your lifestyle.
The idea of “Trading Up” is simple – sell your old home and buy a new one with the profits – but the actual process can be tricky. Most have asked the question, “Do I sell first? Buy first? or Rent first?”. These question are common but can be complicated to answer because every situation is unique. Although, the industry shows that majority of people choose to move forward with selling first. With that said, we developed 5 simple steps to follow in order to successfully trade up to a larger home.
Step 1: Arranging the sale
To start a sale, contact a trusted Real Estate agent and let them know of your intentions. They’ll drop by to make an assessment, and will then discuss a listing price, as well as the commission for their services. When an agreement has been reached, they’ll do all the legwork for you – contracts, showings, pictures, setting up all the marketing aspects like advertisements, and guiding prospective buyers to find interest in your home.
Step 2: Scouting the purchase
While you’re arranging the sale, ask your agent for advice on your upcoming move. Which area fits my lifestyle? What might the price of a home with X characteristics be? You’ve hired your agent after all, so make the best use of them!
You also want to work on getting a pre-qualification letter from a lender, such as your bank or a mortgage broker – it’s just the details of how much you’re able to borrow, and in turn, how much you can spend. Get mentally prepared for the move, so that you can make this next important decision with a clear head.
Step 3: Select an offer
Within 30 days you should start to see offers. It’s currently a seller’s market, so you hold the cards – talk with your agent about creating a multiple offer scenario to get the best price. Remember, this is what will fund your next home, so don’t allow sentiment to get in the way of decision making.
Step 4: Board up temporarily
You’ll have a few accommodation options to consider if the sale happens before the purchase of your next home. First, you can ask your agent if the buyer is willing to do an after purchase rental agreement, letting you stay until you’re ready to move. If this falls through, don’t fret – simply arrange for your belongings to go into storage, and for your family to live somewhere else temporarily. Again, your agent is invaluable here.
If indeed this comes to pass, it’s recommended that you ask your agent to help you hire movers to reduce stress. Just communicate clearly with your family and let them know what’s going on. Additionally, if you think you’ve found the perfect home this time, ask your agent for a double closing – where the purchase and sale is executed simultaneously – for a seamless transition.
Step 5: Make the purchase
At this point you will have viewed a few homes with your agent and possibly even submitted an offer on a promising home. If your offer is accepted, it is now yours! All that’s left is to move in and get comfy for the next chapter of your life.
A lot of these actions happen in parallel, sometimes it can be hard to keep up. But it’s certainly not unmanageable – not if you have the right agent. Use these steps as a guideline, and you too can start trading up without worry. Make your dream home a reality!
Written by: Rustin Davis