6 Huge Mistakes to Avoid When Buying A Larger Home

Unlike the experience of buying a first home, when you’re looking to move-up, and already own a home, there are certain factors that can complicate the situation.  It’s very important for you to consider these issues before you list your home for sale.

Six Strategies

In this report, we outline the six most common mistakes homeowners make when moving to a larger home.  Knowledge of these six mistakes, and the strategies to overcome them, will help you make informed choices before you put your existing home on the market.

ROSE COLORED GLASSES

Most of us dream of improving our lifestyle and moving to a larger home.  The problem is that there’s sometimes a discrepancy between our hearts and our bank accounts.  You drive by a home that you fall in love with only to find that it’s already sold or that it’s more than what you are willing to pay.  Most homeowners get caught in this hit or miss strategy of house-hunting when there’s a much easier way of going about the process.  For example, find out if your agent offers a Buyer Profile System or “House-hunting Service,” which takes the guesswork away and helps to put you in the home of your dreams.  This type of program will cross-match your criteria with ALL available homes on the market and supply you with printed information on an on-going basis.  A program like this helps homeowners take off their rose-colored glasses and, affordably, move into the home of their dreams.

FAILING TO MAKE NECESSARY IMPROVEMENTS

If you want to get the best price for the home you’re selling, there will certainly be things you can do to enhance it in prospective buyer’s eyes.  These fix-ups don’t necessarily have to expensive.  But even if you do have to make a minor investment, it will often come back to you ten-fold in the price you are able to get when you sell.  It’s very important that these improvements be made before you put your home on the market.  If cash is tight, investigate an equity loan that you can repay on closing.

NOT SELLING FIRST

You should plan to sell before you buy.  This way you will not find yourself at a disadvantage at the negotiating table, feeling pressured to accept an offer that is below-market value because you have to meet a purchase deadline.  However, this doesn’t mean you can’t look and decide on areas you’d prefer, etc.  Only that if you find a home and fall in love with it, make an offer which gets accepted, you’ll feel like you’ve put yourself in a pressure cooker!

If you’ve already sold your home, you can buy your next one with or without a contingency.  Beware though, there are pros and cons for keeping or dropping your sale contingency.  You better know and understand what they are,

before you make any final decisions, and you are locked into your decision with no easy way out.

If you do get a tempting offer on your home but haven’t made significant headway on finding your next home, you might want to put in a contingency clause in the sale contract which gives you a reasonable time to find a new home to buy. 

If the market is slow and you find your home is not selling as quickly as you anticipated, another option could be renting your home and putting it up on the market later.  Make sure you investigate the tax rules if you want to choose the option.

FAILING TO GET A PREAPPROVED MORTGAGE

Pre-approval is a very simple process that many homeowners fail to take advantage of.  Pre-approval gives you a significant advantage when you put an offer on the home you want to purchase because you know exactly how much house you can afford, and you’ve already got the green light from your lending institution.  With a pre-approved mortgage, you offer will be viewed far more favorably by a seller – sometimes even if it’s a little lower than another offer that’s contingent on financing.  Don’t fail to take this important step.

GUARANTEED SALES PROGRAMS

Some agents and/or companies offer a guaranteed sales program to enable their sellers to move up into a larger, more expensive property, without having to sell their property.  Many times, these types of programs seem to have a minimum requirement for the amount of time your property must be marketed, with them, in order to take advantage of this program – where they will buy your property.  One caution I’d offer is this:  if this is something you’d consider doing, first, find out the details from them pertaining to the program and the price they are willing to pay; meanwhile, hire a licensed appraiser to determine a fair market value for your property; next, compare what the appraiser gave you (it should be a very detailed report, most of the time with photos of comparable properties), then compare this with what you received from the agent and their company.  If the prices are very close and the other terms and conditions seem reasonable, then perhaps you should consider this option.  If, however, the offer from the agent and their company is quite a bit different, significantly below-market value, then personally, I’d say thanks, but no thanks.  

FAILING TO COORDINATE CLOSINGS

With two major transactions to coordinate together with all the people involved, such as mortgage institutions, appraisers, lawyers, loan officers, title companies, various inspections to be done, etc., the changes of mix-ups and miscommunication go up dramatically.  Make sure you work closely with your agent to ensure you avoid these snags as much as possible.

Illinois Real Estate Licensees serving the suburbs of metro Chicago, IL