Is It Your Time to Sell and Build?

By
Real Estate Agent with Keller Williams Consultants Realty 2003013006

In my over a decade of residential sales, I have helped many home sellers find their way to building their next home. Whether is was their second home or third or forth, one thing remains consistent.  When you are in a home you own now, you know what you want in your next home.  With the low inventory of homes for sale, some people did not realize that a new home was an option. 

Whether you need bigger, smaller, want a subdivision home (even in your same community sometimes) or an acreage home, there are many reasons it makes sense to build.  One big reason is that with the market improving, you may be pleasantly surprised with the equity your home holds.  Rarely (at least in my neck of the woods) can you sell your home for more than it will appraise for.  But pricing your home right and getting it in shape for maximum results is all in the planning.

How long should you plan ahead of time? To be honest, I personally am going thru the same process currently.  Our "someday" with poking around at pre owned listings started way back in 2013.  In addition, at that time we started planning for credit approval.  Paying just $100-300 a month extra in your current mortgage toward the principal can make a HUGE difference in your equity.  It's not always about how much your home is worth, but also how much you owe on your current mortgage.  Pay down credit card debt and keep anything (including pesky old medical bills) out of collections.  Aim for your least debt and highest credit score.

We considered several pre-owned homes.  The prices have risen (which is beneficial to you as a home seller) but nothing "had it all".  Those that "might" work needed some changes.  When we priced the changes vs' building new, it was almost a wash.  The tricky part is mentioned above.  If you have your credit and equity in order, you may be able to stay in your home until your next home is complete and ready to move in to.  If your equity is not 50% or so, you may need to consider temporary housing.  Be smart with your money and remember it's a tool to get the things you want.

If you have family or friends you can move in with for 2-3 months, that can save you some money on rents. Rents in our area for homes and even some spacious more modern apartments can be in upwards of $1000 a month or more and could require a 6-12 month lease.  Many times when you sell your home, the new owners want to close and move in in 30-60 days.  Production builders generally require that your current home be in contract by the time your new home has drywall installed.  Depending on schedules and elements, when drywall is installed you will be 60-90 days away from closing on your new home.  Depending on your situation and needs, lining up temporary housing can save or cost you money.

The risk if you do not sell before closing on your next home is having 2 mortgages.  This is why the requirements for mortgage loans is so stringent.  If your income allows for that temporarily, you may be able to "bridge" a loan.  Ask a knowledgeable and reliable loan officer where you stand.  Find out your closing costs, deposits and goals for downpayment.  It's good to have some savings, but please don't assume you need 20% down. Now is a great time to take advantage of still low interest rates.  You may be ready to go or you may need to do some preliminary financial planning.  Being in the know and prepared before getting your hopes up can really save you a load of disappointment.

Is the process stressful.... Yes.  This is why your motivation and attention to detail is essential to succeeding.  It's easy to dream and say "someday".  But when your plan is in motion there will be days you feel a bit overwhelmed with the details.  Whether that be financial data, picking out a place and a floor plan, hiccups with building schedules or communication, "buyers remorse" or paperwork.... We all have our "hot" buttons. Moving is an emotional experience for many. It takes tenacity and dedication to get to the finish line.  Even if that is asking yourself are you really ready to let a new family take over your current home.  Talk about all of this stuff with your Realtor.  One with your ultimate plan in mind can be a great resource and knowledge can sometime relieve stress. 

There is some bad old information out there that if you use an agent to watch out for your best interest, that builders will charge you more.  In 90% of cases these days, builders have built in to their marketing budget to pay commissions to the brokerage for your Realtor partner.  The cost to use or not use and agent is nothing to you (unless the agents brokerage is charging you some bogus fee). A good agent should be thrilled to be your "go to" expert from planning thru selling and closing on your new home. 

When you are preparing for such a big step, there is no need to feel like you are wasting the time of bankers, builders and realtors to consult with you.  I have had some clients that it takes years literally in the "deciding phase". Then a few months or longer in the "getting the house in shape and ready to market" and in the "can we financially do this" phase.  Once the actual process is in motion, it will be 6-12 months of a little chaos.  Checklists and goals can help minimize that.  Whether you go with a production builder like MI or Pulte or build custom with your favorite builder on land, you have to keep in mind the end result. 

Moving is no fun.  But when you are moving to a place that you know you will love, it's worth the time and effort to make it happen! Call me and I will be happy to schedule a free consult with you!

For expert, experienced advise in your selling/buying process in Central Ohio, call Vicki Workman, ABR, CRS, GRI with Keller Williams Consultants Realty, 614-440-5174.  Www.vickiworks.com or www.movetomarysville.com.  You are never a number with our team.  We care about your plans and make dreams a reality!

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Vicki Workman

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