Before deciding to sell your first home and buy your next one there are several important questions you may want to ask yourself.
Should you stay or should you sell?
Are you considering moving to a new home to increase the amount of your living space? For some homeowners, it may be more cost effective to add on or make home improvements to your existing home instead of purchasing a new home. You may be able to borrow against the equity in your current home to help pay for any renovations.
How much home can you afford now?
Are you prepared to pay all the costs that come with selling one home and buying another? Your financial situation—and the financing options available to you—may have changed since you bought your first home. Know how much you can afford and get pre-approved for your new mortgage before you start looking for your next home. Also, identify all your likely costs, including repairs to get your home ready to sell, real estate professional fees, moving expenses, closing costs and new home expenses.
Is it the right time to sell?
You may want to ask yourself several questions to help decide if it’s the right time to sell or not:
- Are you emotionally prepared to sell?
- Is it a buyer’s or seller’s market?
- Are interest rates favorable for making a move?
Is your home ready to sell?
If there are any obvious repairs that need to be fixed before your house goes on the market, now is the time to consider doing them. You may want to allow at least 30 days to get your home “market ready.” Making your property look its best inside and out can help you get the highest possible price.
Can you avoid selling and buying simultaneously?
If possible, you may want to sell your current home before buying your next one. This can help reduce the stress of trying to line up closing dates or having to get bridge financing to help carry two mortgages at the same time. Try to also choose a long closing date which will put you in a stronger position when purchasing your next home.
Speak with a mortgage specialist to better understand all your costs—and financing options—when selling your first home and buying your next.