For some people, it’s hard to say goodbye to your first home. However, buying your next home means you’re getting more of what you want – more space, better location, and more features that you didn’t get the first time around. And while buying your first home was likely a time filled with unknowns, that you feel more equipped about the second time around, buying your next home brings about a new set of questions, costs and considerations.
The following 7 tips can help you stay informed, save money, and reduce anxiety when it comes to selling your first home and buying the next one.
- Get pre-approved for your new mortgage. There may have been changes to your financial situation or mortgage rules since you bought your first home, so it’s important to know how much you can afford before you spend too much time looking for your next home. It’s always a good idea to set your price range first!
Suggested Next Step: Get an online pre-approval
- Know all the costs. When it comes to buying your next home, the same costs apply as when you bought your first one. You’ll need to be prepared to cover items like: land transfer tax, lawyer fees, and mortgage insurance (if you’re taking on a high ratio mortgage). When it comes to selling your home, your realtor will earn a commission from the sale. Make sure you know how much that commission will be, and how much money you’ll have left after covering this expense.
Suggested Next Step: Speak with a mortgage specialist to understand the costs involved in buying and selling
- Choose the right time to sell. Seasonally speaking, spring is often the best time to sell a home. The onset of better weather means your house will show better, and more buyers are willing to get out and look at homes. Plus, many people like to move in the summer, before the school year starts. Ultimately, however, the right time to sell comes down to when you are ready – such as when your family has outgrown your current space, and when you can afford to make the move.
Suggested Next Step: Speak with a Realtor about the best time to sell your home
- Make sure your home is ready for a sale. You’ll want to get the best return when you sell your home . This means you want the interior – and the exterior – to look its best. Inside your home, try to remove any clutter or extra furnishings that might make your space look smaller or less functional than it is. Also, if there are any obvious repairs to your home, it’s best to make them before putting your home on the market. On the outside, make sure your landscaping is adding to the curb appeal of your home.
Suggested Next Step: Speak with a Realtor for tips on how to prepare your home
- If possible, sell your current home before you buy. While this may not always be possible, selling your home first can remove the anxiety of having to do it according to a pre-determined (and often accelerated) schedule. Plus, if you’re not able to sell by your ideal date, you may get stuck carrying two mortgages, which can be very expensive.
Suggested Next Step: Work out a buy and sell plan with your Realtor
- Try to coordinate closing dates. If you sell first, you have a measure of control over when the closing date will be. It’s best to choose a long closing – i.e. 60 days or more – to give you time to find and purchase your next home. It can also be a good idea to arrange a closing date for your new home that’s a few days earlier, so you can make sure it’s ready to move into. While you will incur some additional costs to set up bridge financing, this practice can reduce stress and make sure your move happens smoothly.
Suggested Next Step: Speak with a mortgage specialist about the pros and cons of bridge financing
- Look at ways to use the equity in your current home. If the reason for your move is to get more space or an improved living area, think about how you can use the equity in your home to renovate, before setting your mind on moving. Examine the costs required to make home improvements, and compare them to moving costs. It’s often cheaper to renovate than to relocate.
Suggested Next Step: Review your home financing options
When you’re selling for the first time, you want to make sure you’re getting the best price for your home, and able to coordinate your move so that you’re not stuck carrying two mortgages for an extended period of time. You also want to know all the costs involved in both buying and selling so you’re going into your next move informed and prepared.
Moving has many challenges but keeping these tips in mind as you start to consider it can help make your move into that new home as simple and stress-free as possible.