Are you a 1st time home seller?
Do you want to move but need to do something with the 1st home you bought? Are you outgrowing your current home and want to move, but don’t know where to start?
This is a process that many agents and consumers overlook and is actually one of the more difficult real estate transaction to complete in a smooth and timely manner. Many, 1st time home seller ask me what is the best way to make this move.
Do I find a new house first?
How do I avoid having two mortgage payments?
And if I sell my house what happens if I don’t find another house, will I be homeless?
So where do 1st time home seller start?
Ironically, a 1st time home seller will start at the same place 1st time home buyers start. You need to get approved for a loan. And I suggest getting fully approved so you have gotten all the docs to your lender before you start packing
things away. Nobody wants to dig through packed boxes looking for the P&L statement from June of 2015! Getting pre-approved also lets you make some informed decisions about your financial future.
The second step is determining what your current home is worth. You need your real estate agent to come and walk the house and go over a comparative market analysis with you. I also suggest looking at any possible improvements that would increase the value of your home. Then put together a detailed plan of improvements, how much it will cost, and what return on investment you can expect. This list needs to cover anything and everything it will take to get your home in perfect condition inside and out. Once you have finished all the work to the house, I recommend getting a “market value” appraisal. This final piece will serve as a third opinion from an unbiased professional. Not only will it make sure that the pricing of the property is accurate and fair but we can use the appraisal for marketing purposes. Being a successful 1st time home seller is with this list and an in-depth valuation of your property.
At this point, you should have a really good idea of the budget for your next home and all the financial ducks will be lined up. Now we want to start some research on where to find your new home. 1st time home sellers must not miss this step, it is critical to making a smooth move. Before you go live with the home you are selling you must have narrowed down the search for your next house. At this stage, you do not want a particular house picked. What we want is a small area Like an elementary school district, large neighborhood, or geographic area. This area must have at least 7 homes on the market at any given time that match your general criteria. In other words, these 7 plus houses would all “work” for you or your family. That means size, style, location, amenities, etc all are in line with your needs. what we want is that at any given time there are 7 plus houses. All we would need to do is view the homes and pick the best one. Remember, the neighborhood is more important than the actual house and picking the neighborhood MUST be done prior to putting your house on the market.
Now we are ready to sell your house. If we have followed the steps, gotten the house in the best shape that we can, and priced the home properly, we should a contract should come in quickly. In this contract, you will add a “home of choice contingency”. This makes the sale contingent on you contracting the right home for you and keeps you from being homeless. But because you have done your homework this is just a precaution because we know that whenever a contract is signed on the house you are selling we will have 7-10 homes to go and look at that day.
Once we have found your new home there is one more contingency built to protect you, “Contingent on home sale”. This is to make sure that you don’t end up with 2 houses! If for some reason the sale of your current home fell apart you would be protected from having to buy the new house and could cancel the purchase without penalty. The only problem is this contingency can hurt your negotiation power. To counter that a 1st time home seller can rely on the pre-approval, and a strong real estate agent to make their case for them. Over the years the “contingent on home sale” has been misused and an agent that has put you in the right position and can explain to the seller and their agent on the home you want to buy that your deal is strong.
Being a 1st time home seller is a daunting spot and many don’t know how to approach this move. In fact, many homeowners never move out of fear of the process. And as you can see, 1st time home seller has a few moving parts, but it can be a rewarding experience. And I find that when you are buying your second home you have a lot more insight into what you want and don’t want in a house. Because you are familiar with the buying process it gives you more time to focus on the search.