Before you buy a bigger or smaller home, it’s wise to consider that at some point you may want or need to sell your current home. Some repeat home buyers get so caught up in the home buying part of the process, that they overlook the selling side until they’re forced to take action. This can lead to trouble on several fronts.
Most sellers need do some de-cluttering, cleaning and sprucing before they are offer their home for sale. That is, if the aim is to maximize the return from the sale. Properly preparing a home for sale takes time.
People who buy their new home first usually feel pressure to sell their old home as quickly as possible. The prospect of owning two homes for long is not too appealing. One way to ensure that you can bring your home on the market as soon as you’ve found your next home is to have your current home prepared for sale, before you get into contract to buy the new home.
This strategy requires planning ahead. One couple did just that when they decided to move from their Oakland home to a larger home in the area. As soon as they knew they wanted to move, but before they contracted to buy a new home, they started moving excess personal property to a rented storage space.
They ordered termite and home inspections, and fixed some of the defects that were mentioned in these reports. They spruced up one bathroom, repaired a deck, replaced a rotted back porch, and finished the landscaping they’d started years before. They were easily able to bring their home on the market within days of finalizing a purchase contract for a new home.
Another couple didn’t fare so well. They didn’t start preparing their home for sale until they knew they had a home to buy. This meant finding a contractor on short notice, which isn’t easy, particularly during the busy home buying season. They ended up hiring a contractor with whom they had no experience.
After suffering through a week of incompetence, the couple fired the contractor. They then had to scramble to find people to finish the job. They lost weeks of marketing time. It was an extremely stressful situation given that they had two mortgages to pay, and a swing loan with a short due date.
HOUSE HUNTING TIP: The fear of owning two homes for an unknown period of time caused another couple to decide to sell before buying. They planned their move months ahead of time. Realizing that they needed to sell for a high price in order to be able to buy into their favorite neighborhood, they decided to make cost-effective improvements to their home before selling.
They met with their real estate agent who helped them to prioritize their fix-up-for-sale projects. Their agent introduced them to a decorator who helped them select attractive paint colors. They de-cluttered, spruced up the garden, and hired a stager to help rearrange furniture and accessorize their home. The payoff was that they sold their home for more than $100,000 over their asking price.
In addition to reducing the stress of owning two homes, a huge benefit of selling first is that you know exactly how much money you have to work with. To avoid having to move to an interim rental, try to include a clause in the purchase agreement that allows you to rent back your current home for a time after closing.
THE CLOSING: However, moving to an interim rental isn’t necessarily a bad choice. It gives you plenty of time to find the right house, without feeling pressure to buy quickly.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.
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