Are you thinking about transitioning from your current home to another? maybe the kids have moved out and you want to downsize, or maybe you've outgrown your current home and need something bigger, or maybe you just want a change. Whatever the case, it is important to be prepared and get an early start on things. We've put together a list of the 10 most important things you need to know when considering buying and selling real estate.
1. Figure out what you really want in a home. Moving is expensive and a lot of work, you only want to do it if you really have to. Is there anything about your current space you could change, renovate, or add on to make it work?
2. How much can you afford? This will probably depend largely on how much your house is worth, so sooner than later it is a good idea to have a realtor come out and provide you with a market assessment of your home. We can provide you with a complimentary home valuation, get in touch with us here.
3. Choose a REALTOR®. Start researching realtors and choose the one you’d like to have represent you. Your realtor will be an invaluable resource and be able to provide recommendations on what you need to do to get your home ready to sell, and give you referrals to various professionals you may need.
4. Go to the bank, or mortgage broker. You want to know four things: 1) when does your current mortgage renew. 2) Will there be a buyout penalty for breaking your mortgage? 2) will the bank allow you to transfer your mortgage to the next home? 3) How much will the bank approve you for? This information combined with the value of your current home will provide you with the price range of the next home you wish to buy.
5. Determine your needs and wants list. Once you determine this, go online and look at homes for sale to see what meets your criteria and communicate this to your realtor so they can start looking for you as well.
6. I’m ready to make the move, what's next? It’s a good idea to go out and start looking at some homes to get an idea of what you like, but you should also spend time making sure your home is ready for the market. When you buy your next home you will likely need a conditional of sale. To give yourself the best shot at getting your offer accepted, you want to make sure your home is ready for the market. We provide complimentary staging to all of our listings, and make sure our sellers are ready to go well in advance. At the end of this article you can request a copy of our sellers guide for tips on what to do to get your home ready for the market.
7. Should I sell before I buy? It all depends on your risk tolerance. If you have a plan B in case you can’t find a place, it’s not a bad idea to sell first. The benefits to this strategy are: 1) You will know exactly how much money you will have to work with. 2) You won’t need a condition of sale in your offer, this will give you more leverage and help you get a better deal. If you don’t have a plan B, we can always try and get a long closing date to allow more time to find a place, but if you are very risk averse, you may want to find a home that will take a conditional offer upon you selling first. Both options are used frequently and there are pros and cons to each.
8. What about closing dates? We can generally negotiate for closing dates to line up on the same day. If you want to move in first you can talk with your bank about bridge financing. What is bridge financing? read all about it here.
9. What costs should I be aware of? In addition to realty fees you will need to be aware of the following exenses. On your purchase you will have land transfer tax. There are many calculators you can look up to find roughly what it will be, but on a $600,000 purchase, this will be about $8500. You will have to pay legal fees on your purchase and the sale. Legal fees very depending on your sale and purchase price, contact a few lawyers in advance to get some quotes. You’ll need to budget for an appraisal, and possibly the cost of home inspections.
10. Start the process early. Be proactive, a lot of people delay until the last minute leading to a stressful time. There is no harm in having the conversations now so you are ready when the time comes.
Here are some FAQ:
How much will I need for a down payment? You will need a minimum of 5%.
Do I need to sell my house? This depends on a couple factors; but if you can afford to keep your current home and rent it out, this will allow you to have an investment property. Generally you'll need 20% down on your purchase and the rent your charge will have to cover the mortgage payment. Talk with a mortgage specialist.
What is the average closing date? It can be anywhere from 30-90 days, but typically we find them to be about 45-60 days.
How many homes do people see before buying a house? there are no set criteria but most people see about 8 homes before finding the right one.
Download a copy of our FREE selling guide here.