Moving up, otherwise known as selling your current home and “right-sizing” to a home that fits your lifestyle better, is a topic we receive many questions about from our clients. Do we buy or sell first? Is now the right time? Should we wait for a raise, the market to cool down, to save more money, or to pay off student loans?
The answer is, it depends! Your individual situation needs to be considered. We do, however, have some general rules of thumb for helping you make the move.
1. Build Your Team
You will want to work with a trusted Realtor and lender (and your financial advisor if applicable) to help you sort through the below steps.
Determine What is Realistic Financially. This is a two-part question:
- Can you afford to keep your home while you look for a new one? Often clients are surprised to find that they CAN afford to make this work, either with help from a relative, a creative program from a lender (like a bridge loan), or moving some money around / taking a loan from a 401k, etc. A lender can help you through this question.
- Are there homes that meet your needs that fit within your budget for your new home? How often do those homes come on the market? For instance, some neighborhoods are very popular and may only have a few homes come on the market each year. Also, what will your proceeds be when you sell your current home? A Realtor can help you sort through these questions.
2. Establish Your Timeline
If you can afford to keep your home while you look for a new one, this gives you more options and flexibility. Here is what we typically recommend, but we always create a custom plan for every client based on your specific needs.
Start looking for a home as soon as possible! Home inventory is low, meaning there are not a lot of homes available to buy. We want to make sure we are in a position to act quickly if and when the right home comes on the market (or we find one for you off-market). So, study the market!
In the meantime, we can start prepping your home for selling. That way, when we do have an accepted offer for the new property, we can get your home on the market. We can move as quickly or as slowly as you’d like. Sometimes our clients’ goal is to get their home under contract before they close on the new home so they don’t have to move funds. In this case, we would have your current home photographed in advance so we can go to the market right when we ratify a contract on your new home.
If you need (or prefer) to sell your home before buying a new home, don’t stress! We help clients in this situation all of the time and we can help make it as seamless as possible.
If you buy your new home before selling your old home, a home sale contingency could come into play in this scenario. With a home sale contingency in place as part of the sales contract, the sale is contingent upon the successful sale and settlement of the buyer’s current home. If the buyer’s home sells by the specified date, the contract moves forward. If the home doesn’t sell by the date noted, the contract can either be extended (if both parties agree) or terminated by the sellers.
➤ Read more about the home sale contingency in our related post here.
First, we want to make sure there are good options for you to purchase and you are familiar with the reality of the market, so when your home sells you can be confident you will be able to find good options. Or, if you have somewhere you can live after your home sells and before you purchase a new one, this is the time to get that lined up.
We will also be preparing your home for the market during this time, similar to the above scenario. Once we’ve established there are good options for you to purchase, we will set a date to put your home on the market.
In this scenario, we also recommend listing in our Compass Coming Soon or Private Exclusive Program. We can start marketing your home to the more than 1,000 local Compass agents as well as the 20,000 Compass agents across the country in hopes of generating an off-market offer that will give you the flexibility to not have to have your home “show ready” every day or be pressured to accept an offer before you are ready. You would want the ability to accept an offer with a short closing, for example in 30 days or less, if the price is right with a long rent back so you can stay in the house an extra 60 days while you look for a new home. We recommend also exploring other options such as temporary housing should you receive an offer you can’t turn down!
If we don’t get an offer in the Coming Soon program, we will go to market according to your timeline. Once we have an accepted offer, we turn up the intensity of your search to find your next home.
We know that navigating this move is one of the biggest financial decisions you will make in your life, and we are here to help. There is a lot of information to cover, and this is just the tip of the iceberg! We have helped thousands of buyers and sellers over the years and have a lot of insight into the process. If you’d like, we would love to get together over coffee or on a call to hear about your goals, share our experience, answer any questions you may have, and walk you through the process.