The Move Up Buyer

Move Up Buyer Villa PropertiesWith the California housing market in recovery, many homeowners have enjoyed seeing their home appreciate in value. As a result, many of people, especially first-time home owners, become a move-up buyer and purchasing a larger home. There are number of reasons why a homeowner becomes a move-up buyer, including:

  • The home has become too small because the family size has increase.
  • Desire to move from a starter home and upgrade to a larger, nicer and more expensive home.
  • The home does not have the desired amenities, such as a large backyard, swimming pool or family room.

Since you will be both selling and buying a home, talk to an experienced real estate broker to find out what the process entails, how you should prepare yourself and potential pitfalls.

Obtain information on current market conditions so that you can develop a strategy to determine if you should sell first or buy and then sell. You should also get data on the price of comparable homes–both for the one you intend to sell and the larger house you would like to purchase.

Selling a Home in a Seller’s Market

In a seller’s market, before you begin actively marketing your current home, look for a house to buy.  To prevent being saddled with two mortgages, have a clause inserted in the sales contract that will make the closing contingent on you locating a new home and closing the deal.

It’s common for home buyers to agree to delay the closing date or turn over possession of the property 30 or 45 days after closing, but you should not expect an open-ended arrangement.

Purchasing a Home in a Buyer’s Market

Consider purchasing a home first in a buyer’s market. You will have a larger inventory of homes from which to choose and at reasonable prices. However, this type of market works against you because your home must compete against an abundance of other homes.

To protect yourself from having to pay two mortgages, add a provision to the purchase contract that will make the deal contingent on you selling your home. In a buyer’s market, many sellers are motivated to accept this request.

Sometimes, a move-up buyer may end up paying two mortgages until the home can be sold. In this case, make sure that you have the finances to cover the costs and have a temporary place to live.