It doesn’t have to be difficult
Buying a home can be daunting considering the investment in time, money and energy required. So why do people move after about 5-7 years? Research shows the top reasons are that they want more space, are looking to upgrade or are relocating for work. Home owners may hesitate to consider moving because they remember how competitive the market was when they bought; but when the need for more space or a job relocation comes up they realize that selling and buying simultaneously is actually not that difficult. One of the other barriers to moving is due to the potentially high fees involved. A broker fee alone could be enough to wipe out the appreciation a seller might see after 5 years. Other fees for sellers include tax stamps, attorney fees and capital gains tax. On the buy side, although the commission may be paid by the seller it is factored into the list price. While I would recommend using an experienced broker to make your life easier you’re not required to use one. You do need a real estate attorney to transfer the funds and handle the 2 closings.
How does this work?
- Get approved. The best way to start the process is to figure out what your current home is worth. You can look at similar properties that recently sold and compare them to yours. Brokers should be happy to provide a free market estimate for you to earn your business. Once you have an idea of what your property will sell for you should talk to your lender about your price range for the purchase. Your lender can help you figure out what you can afford taking the value of your current home into consideration.
- Look at available homes. Look at what’s available that fits your criteria and price range. Take into account that homes can sell above the list price. You don’t want to be in a situation where you can’t get what you’re looking for after listing your current home. You can start looking at properties online but it would be great to see some in person at this stage.
- List your home for sale/Make an offer on the new one. This is where the process gets a little tricky as it’s important to take both contracts into account. Both transactions need to be balanced as they depend on each other. You and your broker can use contingencies and contract dates to make this work. You can coordinate the dates from both contracts so the closings are scheduled for the same day. In the Boston area it’s common to make the sale contingent on finding a suitable place to buy. You could also make the new purchase contingent on your sale.
- Close on both. Your attorney can coordinate both closings on the same day. He can usually hold the proceeds from your sale so you can use it towards your purchase. Schedule movers as early as possible. Movers should be able to store your things and move them to the new place once you get the keys.