We recently had a great, often asked question emailed to us from a past client who has already started to outgrow their current home they purchased just a few years ago, “We have been toying with the idea of upgrading to a larger home and wanted to get your thoughts. Our challenge is that we don’t see how we’d be able to purchase a new home in this area without selling our existing one, as we would need the equity for down payment.”
This question is age old but with the market ticking up every year (month, day!) it’s being asked more than ever before. Many assume they will have to sell their current house then start renting somewhere else while they search for a new house. This is not ideal as not only will you have to again do the renter dance- searching, moving, expenses, no equity! It’s also very disruptive to anyone’s lifestyle and family. It’s already difficult to buy a house in this competitive East Bay market. So how can it be done? That pivotal jump off point can be daunting, and many people put it off for as long as possible out of confusion and fear.
The truth is, there are several ways to go about it. An experienced REALTOR®, like KRG, would be able to walk you through all your options in detail and answer any questions for you. Each client has their own timing, financial situation, and family dynamic, so working around those three core values gives us a better understanding of what will work best for you.
There is one common way I am going to share with you that I hope takes some of the pressure off. The basic outline of this option looks like this:
1. Meet with your REALTOR® and determine needed repairs, and upgrades to prepare your home for sale. (This has everything to do with the timing, financial, and family situation which is why it’s first and important!)
2. List your home for sale (on or off market, the processes are different depending on which one suits you, and we specialize in off-market!)
3. While your home is on the market, now is the time to begin browsing homes. Prior to this you’ll want to stay committed to the task at hand, preparing your home for market. Sure you can browse homes online, but if you jump ahead of yourself and start considering new homes to buy, you’re going to end up discouraged. The right time to find a property to purchase will be after your home is already listed for sale, or even better, after your home has had an offer and you’ve accepted!
4. Requesting a “rent-back” is not uncommon. A “rent-back” is simply when you request that as part of the contract to purchase your home the buyers allow you to stay in the home, renting it from them while you buy another house. This way you don’t have to move twice! A few things with this you’ll want to consider: it may take a little bit out of your sales price when selling. BUT if the market is hot for sellers, your REALTOR® can negotiate for you a free rent-back for a few days, weeks, or more rarely, months. If free is not an option, you can pay market rent price, or at “PITI” which means you are covering the buyer’s payments on the house during your stay there. This option allows you some time to remain in the home while you search and find your new home. There are many different ways to structure a rent back, ask your local REALTOR® expert for more details! (firstname.lastname@example.org)
5. Complete the sale of your current home, get your $$, and move to your next home using the money from the sale. This sounds so easy right? It can be stressful, we’re not going to tell you working within a timeline isn’t stressful, but the process can be smooth, it’s all about attitude! Focus on the good and making the transition, ask your REALTOR® for support when you need it, and soon enough you’ll be in your new home. There are risks when buying, and risks when selling, and both at the same time can feel overwhelming. That’s why you have not only a REALTOR®, but an entire team working with you at KRG! We are here to steer you in the right direction.
Karen Richardson Group (KRG REALTORS®) is your local real estate resource team. We service both Contra Costa & Alameda counties and are listed as one of “America’s Best Real Estate Professionals” by REAL Trends News Source! Connect with us today!
925-438-2011 / Karen@karenrichardsongroup.com
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*The REALTOR® trademark is more than just a real estate practitioner: they must adhere to a strict Code of Ethics that protects clients, the public, and other real estate agents. The term REALTOR® is not only a trademark owned by NAR and protected by federal law, it’s a valuable membership benefit that distinguishes members from other real estate licensees.