Many people begin their home-buying journey with the goal to save up enough money to buy a house that is close in price to what they currently own.
By selling your current home, you give yourself more cash to spend on a new one. The way it works is by offering your current home for sale and receiving $500 or more per square foot, you get the profit!
The tricky part is knowing when to sell your house. Luckily, we have some tips here for you!
This article will talk about why it may be a good time to sell your house before buying another one. While it’s not always ideal, there are times when it makes sense to do so.
Reasons why you should sell your current house before buying a new one
Being able to compare costs is one of the most important reasons why you should consider selling your current home before looking for a new one.
By comparing what it would cost to purchase a new home, have it built or renovated, and how much money you’d save by selling your current home, you can determine if it makes sense to move at this time.
You may be able to hang onto your present home longer if saving enough money is not possible. It all depends on your budget and dreams of future homes!
Another reason to consider staying in your current home is because moving can be expensive. Moving boxes, getting shipping quotes, and storing belongings take up space which could be saved if you were renting an apartment close to where you work.
And lastly, selling your current home means you do not need to find a new place to live immediately. You can look around for a while until you find the right fit and then get into the housing market more easily since you already have a house.
Reasons why you should keep your current house
Being in a new home situation can feel really stressful at times.
Thinking about selling your current house and buying a new one is extremely expensive! The cost of closing on both houses together can easily add up to more than just paying for a new house alone.
Closing costs are very common, they include things like legal fees, broker’s commission, property taxes, homeowner’s insurance (HOI), and mortgage escrow. Escrow is an automatic savings account that your lender requires us to put money into while the properties are being transferred or sold. This is typically done once a year when there is a transfer of ownership.
There are also additional expenses that come with moving such as remortgaging, finding a new place to live, and transferring all of your belongings. All of these extra costs can quickly add up to much more than what you would have spent on renting.
In fact, according to What Makes A Property Tick, it can take anywhere from six months to over two years to break even if you sell your current house and buy a similar size house. This means that instead of making a profit, you could be losing money!
Given this information, it makes sense to try to hold off on looking for a new house until you know you will have your own space soon.
Selling your current house will allow you to have more money
It is totally okay to sell your current home before looking for or buying a new one. The reason why this is such an excellent idea is because it gives you extra money!
Selling your current house can net you some significant savings in closing costs, plus you get to take advantage of the rising value of your house as well as earn back what you paid for it.
If you are thinking about selling yourself-of, make sure you do your research first by talking to others who have done it successfully, reading reviews, and getting estimates from professionals.
General tips: remember that if you’re trying to move quickly, it's better to pick a neutral buyer rather than going after a specific person or family. That way, anyone can be your next tenant which makes finding a new place easier.
You need time to find the right new house
After owning your current home for several years, it’s probably hard to imagine living in something else- especially if you have big dreams of moving up or starting a family.
But before jumping into the next step, you should consider whether selling your current house is the best option.
Finding a new place to live can be really tough, even when you’re paying top dollar For most people, their initial search includes looking at houses with an agent that they are already familiar with, if possible.
That makes sense — agents know the market, how buyers behave, and what types of homes appeal to different ones. Agents also get paid by both parties, so there’s incentive to do well for both you and them!
However, not every area is easily accessible via public transportation, and having easy access to major highways and airports is important to research ahead.
Knowing your budget will help determine if it’s worth it to hire an agent, as some fees tend to run higher than others.
What about those close to you? If one of the main reasons why you want to move away is because you’ll lose touch with friends, then making sure everyone knows about the sale could prevent someone from buying and leaving you behind.
On the other hand, if you think your friend would still be interested even after the sale, you may decide to go through with it.
You should always have a backup plan
It’s very common for people to feel nervous about selling their current house, and having savings in a separate place is usually one of the biggest reasons why.
After all, how will they pay for the down payment if they sell their home? How can they take out a mortgage when there’s no house to live in?
But what most people don’t realize is that you don’t need to wait until your next house to be prepared for a sale. In fact, it’s better to start prepping now than later because only spending money on a house you’ll still own makes sense.
Don’t worry about being able to buy a new house yet though, buying a new one isn’t impossible without an advanced planning process either! Read on to see our best tips for whether or not it's sensible to sell before investing.
Selling your current house will allow you to choose the location of your new house
A lot of people begin looking for their next home as soon as they sell their current one, or at least before the end of their current lease.
Selling your current residence can be quite the stressful process if you don’t know what you are doing. There is a very fine line between selling quickly and spending lots of money, so it is important to look into the costs involved thoroughly before agreeing to that sale!
Some of the fees related to a house sale include: real estate agent fees, mortgage broker fees, title search fees, surveys, and more. All of these have very expensive prices, which could easily add up to a large amount of money.
In this article, we will talk about some reasons why it is a good idea to wait to see how well your apartment does before buying a new house. We will also discuss some ways to manage your housing needs while still waiting for that perfect home.
You can choose the house you want
A lot of people begin their real estate investing journey by buying a home to use as their main residence or what they call their investment property.
While this is a great way to start, it’s not necessarily the best approach for everyone.
You will need to think about how much money you have set aside to pay down your mortgage and other monthly expenses like utilities before you make the switch from renting to owning.
And unless you are very good at in-depth research and know exactly what you want, it may be hard to decide if a new house is what you want either.
The first few years that an investor buys a house is usually spent looking at houses, negotiating on a sale, finding tenants, completing renovations, and getting everything ready to live in.
These things take time so don’t get too excited early before you have done all of that. Sometimes even taking off work to look around takes a week or two alone!
Also, while most investors focus on the financial benefits of having a second house, there are non-monetary reasons to keep yourself within your means.
For example, many people feel more relaxed when they only have one place to worry about. Having a second house can also cause stress due to extra responsibilities such as paying bills, maintaining both properties, and being aware of both places’ finances.
You can consider the price you want to pay
The first thing we should note is that it’s totally up to you whether or not to sell your current house before buying a new one. This is an important decision because it will have an impact on your savings, your lifestyle, and how much money you have in the long run!
With that being said, let’s look at some reasons why selling your current home may be the best option for you. First, what are the chances that your current home will increase in value? If this seems unlikely, then there’s no need to invest in expensive renovations or improvements.
You could also be leaving money on the table if you don’t include costs like closing fees and property management when calculating how much you should spend on your new home. And while it might cost you less to buy a smaller, lower-priced house now, it’s important to remember that larger homes offer more space which many people desire.
Furthermore, even though it’s common to feel pressured into thinking about sale opportunities during the early stages of homeownership, doing so really only makes sense once you’ve made enough money to afford a down payment on a new home.