When you want to sell and trade up, there are specific considerations not present with a home purchase alone. Not only is there the issue of financing, 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. Just as problematic is the dilemma of having no place to live during the gap between closings.
Knowledge of possible mistakes you might make, and the strategies to overcome them, will help you make informed choices before you put your existing home on the market.
1. Rose-colored glasses
Most of us dream of improving our lifestyle and moving to a larger home. The problem is that there's sometimes a discrepancy between our hearts and our bank accounts. You drive by a home that you fall in love with only to find that it's already sold or that it’s more than what you are willing to pay. Most homeowners get caught in this hit or miss strategy of house hunting when there's a much easier way of going about the process.
For example, find out if your Realtor (me) offers a Buyer Profile System or House-hunting Service (I do), which takes the guesswork away and helps to put you in the home of your dreams. This type of program will cross match your criteria with all available homes on the market, including new construction, and supply you with emailed information on an ongoing basis. A program like this helps homeowners take off their rose-colored glasses and, affordably, move into the home of their dreams.
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 the house 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 ten fold 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 an equity loan that you can repay on closing. Check with your Realtor (me) about which repairs should be completed before putting your home on the NJ real estate market.
3. Not selling first
You should plan to sell before you buy. This way you will not find yourself at a disadvantage at the negotiating 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. But because this is a buyer's market, not just in New Jersey but nationwide, try to find another option. You might want to rent your home and putt it on the market later, particularly if you are selling a smaller, starter home. Investigate the tax rules if you choose to become a landlord.
4. Failing to get a pre-approved mortgage
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 already have the green light from your lending institution. With a pre-approved mortgage, your offer will be viewed far more favorably 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. And don't get just a pre-qualification letter, get pre-approved.
5. Failing to coordinate closings
With two major transactions to coordinate together with all the people involved such as mortgage experts, appraisers, lawyers, loan officers, title company representatives, home inspectors or pest inspectors the chances of mix ups and miscommunication go up dramatically. The professional help of a Realtor is invaluable in this timing.
There are many new homes under construction in Mercer County NJ and surrounding areas. Builders are anxious to sell. Seriously consider selling your current home and taking advantage of the ability to buy a new home at low prices and low rates. Call or email me to discuss your needs and plans.
Joe Giancarli, SA
Real Estate Advisor
609-658-2612
jgiancarli@remax.net
http://www.joegiancarli.com/
http://www.njhomesource.com/
http://www.njhomesource.blogspot.com/
www.activerain.com/blogs/josephgiancarli
Find homes for sale using my new mobile app. Just text JOEG to 87778 and you will be sent download instructions. Once installed on your device, you will be able to do searches and see complete listing details including photos and prices. If your device is GPS enabled you will also see the listings on a map. (Data rates may apply.)
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