Buying after relocating may not be best financial move
The long debated question; should I sell my home and move now or wait a few more years and see if my home will appreciate in value, is one that bewilders many homeowners.
The motivation for selling is a key factor. Are you commuting to work several hours a day and the commute is killing you? Are your children grown and your home is now too big, in addition to being a burden to maintain? Is your home too small? Have you taken a job out of the area? Can you no longer afford to own your home? Or do you no longer want to pay the price it costs to own your home?
These are all good and motivating reasons for considering making a move. Not only do current market conditions enter into the equation, but making a move like this is usually more complicated than it was the first time you bought a home.
HOUSE HUNTING TIP: First, you need to find out the probable sale price of your home and access the state of the current home-sale market in your area. You also need to know what you can do to maximize the salability of your home. Then you should consider where you'll live next and how much that will cost.
If you don't already have one, find an experienced real estate agent who specializes in your area. Meet with your agent at your home and ask for a comparative market analysis. This will give you information about what homes like yours have been selling for in the current market.
You'll also want to know how long you can expect it to take to sell your home. How many homes like yours have sold recently? Are homes like yours in high demand? Or, is it located in a less desirable area that could mean a longer marketing time and, perhaps, a lower price than you were expecting?
Ask your agent to walk through your home with you and point out what should be done to make your home marketable. Homes that sell today are priced right for the market and are in move-in condition.
You want to make cost-effective improvements. If the kitchen and bathrooms are outdated, consider a cosmetic redo. Update paint, hardware, light fixtures and floor coverings, if necessary. Don't do a complete remodel unless you plan to stay in your home for years; otherwise, you won't recoup your investment.
Deciding where to move -- and when -- can be difficult. Some buyers can afford to buy a new home before selling, and prefer to make the move that way. Most repeat buyers can't afford to buy first. Others who can won't buy first due to market uncertainty and the stress of owning two homes at once.
The most prudent approach to making a move from one home to another is to sell first and rent if necessary until you find the right home to buy. By selling first, you will know exactly how much money you have to apply to a new home. Today's housing market is volatile. A dip in the market could shave tens of thousands of dollars, or more, off your selling price.
The other benefit of renting before buying is that you're under no pressure to buy the first listing you see. Interest rates are low and are expected to stay low through 2012. Prices are also low and aren't expected to move up much for the next several years.
THE CLOSING: This gives you time to find the home that will suit you for the long term.
Sources: Dian Hymer 2012