As a move-up buyer, you're likely in a better financial position than when you purchased your first home, and a REMAX Hallmark® agent can help optimize your new selling strategy. If you have an existing home, you probably have savings and/or equity, which can make the move feel less like a compromise and more of a thoughtful selection. That said, the logistics of upgrading your location and home can present new challenges and requires a carefully considered plan.
Here are three options for the smart move-up buyer.
Sell first, buy later
The “Sell First” strategy is ideal if you're a move-up buyer who doesn't want to be stuck paying two mortgages simultaneously. It also reduces the chances of having to lower your asking price if the sale isn't happening at your preferred pace. This is a good option for move-up buyers who are banking on the proceeds of their sale to fund their new property. By selling first, you'll know exactly how much money you have to purchase your next home.
Time and align your purchase and sale
Aligning your purchase and sale closing dates can be tricky. Remember that there are three parties to these transactions: you, the person you're buying from, and the person you're selling to, each with possible varying contingencies. You'll also have to move out and move in on the same day.
In this scenario, flexibility is your best friend. You'll need to plan ahead, research neighbourhoods, be pre-approved for a mortgage and have started the organizing and decluttering process before the big move.
Buy first, then sell
If you're buying in a seller's market, then buying first might be the way to go. By buying your new home before selling your old one, you won't feel rushed into settling for a property that doesn't meet your needs, or having to seek temporary housing while you shop in a tough market. You'll still live in your existing home, allowing you time to shop and continue looking until you find that perfect place. Note: This could require a bridge mortgage.
Your move-up strategy will depend on a number of factors, such as your financial situation, the current housing market conditions and your comfort level. Prepare yourself by choosing to work with a knowledgeable REMAX® agent who can ensure a smooth transaction at both sides of the offer table.
From the glossary
Bridge financing
A short-term loan designed to “bridge” the gap for homebuyers who have purchased their new home before selling their existing home. This type of financing is common in a seller's market, allowing homebuyers to purchase without having to sell first.
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