Synonymous with the American Dream – the grass is always greener on the other side, and there is always something bigger or grander out there with “your name on it.” We work with many homeowners who go through this life motion when they purchase a small starter home and soon feel as though they need more space, amenities, and the list goes on. As your family and financial security grows, you start thinking about what your dream home looks like and what you can do to make the dream become a reality. We recently worked with a Chula Vista native, Shelly, who had purchased her first condo in 2009 when the market was low. It didn’t have many bells and whistles, it was small and pretty outdated, but her mortgage payments were low and it was a place that her and her husband could start a family. Now that the market is hot again and she can sell her starter home for a significant profit, she’s looking to cash out and buy her dream home. Buying into a bigger home with a larger yard and in a better neighborhood would be an important long-term investment for Shelly and her family. Because of this, she wants to do it the right way!
Buying First versus Selling First: Pros and Cons
If you live in one home and want to move into another, you have to decide how you want the process to play out. A lot of this depends on your financial situation and what you can endure as far as waiting etc. Here is a quick breakdown of your options:
- Buying first: If you’re planning to secure your dream home first before selling your current house, consider the potential financial strain of shouldering two mortgages. There are two things that you can do to make this process easier: 1) Purchase your house using a HELOC or bridge loan. What is a bridge loan? Bridge financing would allow you to own two homes at the same time, without having the funds for the second down-payment. It basically serves as a short term loan, which will be repaid upon the sale of your starter home. 2) Your other option would be to rent your starter home out while you buy and move into your dream home. This may be tricky, and isn’t what we would recommend…you don’t want to create more stress for yourself than need be.
- Selling first: If you sell your starter home first, you will be able to unlock the equity from the sale and use that as a down payment on your new forever home. Financially speaking, this is your best option for a seamless move from one property to another. The problem with doing this is you may find yourself without a place to live between the sale of your old home and purchase of the new one. One thing that can make life much easier in this situation is a rent-back agreement with the new owners of your starter home. By renting your old house until the new purchase goes through, you won’t have to worry about moving twice before you get into your dream home.
Make Sure Your Dream Home is Just That!
Finding your “dream home,” sounds pretty easy, right? It can actually be more stressful than you may think. If you are investing in a bigger, better home for your family to grow up in, be sure that it crosses off every important box on your checklist. Here are some things to consider when relocating your family into your perfect dream home:
- Wish list: If this is your dream home, be sure it checks off all items on your list. This isn’t like your starter home where you knew you had to make compromises. This is your DREAM home, make sure that it truly is!
- Neighborhoods: One of the most important factors that affect homeowner satisfaction outside of their actual property, is the location of that property. What community will fit your family’s growing needs? Do you want to be able to walk to coffee shops and restaurants? Would you prefer more privacy and to not have neighbors right next door? Think about these things, because they will have an impact on your lifestyle.
- Lot size and location: Your lot will be a huge determining factor in what you can do with your property. Will you have enough space for a garden? Does your lot have a view? Your lot will stay the same regardless of what you do to the home that sits on it, so be sure you like the lot.
- Property’s Age: The age of the property can also be a big indicator in what your maintenance will look like while owning it. If you love historical homes and you don’t mind a little bit of renovations to make a house feel like “home,” an older home may be just the ticket. But, if you’re looking for move-in ready and little to no maintenance, you should probably be hunting for new builds.
- Space: How does your current space feel? Finding the right balance between too small and needing to constantly reconfigure for more storage and, on the contrary, a space too large that costs a lot of money can be a fine line. Be sure to really think about this and make a decision that best fits your family’s needs.
How Selling Direct Can Make Selling AND Buying Simpler:
Whether you want to sell first, buy first, or do both simultaneously- you do have an option in selling simpler. By selling direct to a cash buyer like us, you can sell on your timeline and completely customize the transaction. Do you want to sell right away? Fine, we can close in as soon as 7 days. Do you want to wait to sell until you find your new dream home? Great, we’ll work within YOUR timeline. Do you want to sell and receive cash for your new home, but can’t move in for another month? No problem, we’ll pay you cash for your home and then you can buy your dream home and rent from us until it is ready. That’s what we mean by “selling simpler.” So, if you’d like to sell quickly in order to buy your dream home, we would love to help you on your journey!Views: 9