Move-Up Buyer: Step 2
Step 2: Choosing an Option?
Option A: Buy 1st/Sell 2nd
Option B: Sell 1st/Buy 2nd
Move-Up Buyer: Step 2
- It is likely you have thought about this question already, but before choosing an option that will suit your situation best. You will need to complete 1 Task from both sides first (BUY side & SELL side). Each providing valuable pieces of information that will help to determine which Option is best for you. Both of these Tasks have been included below along each option and things to consider
Information needed for BUY side: Get Pre-approved!
- Here I can introduce OR re-introduce you one of our preferred Lenders via email. You will be asked to fill out an online application which will include items such as: pulling credit, collecting documentation, reviewing income, assets & any debts (i.e. credit cards, CURRENT MORTGAGE, etc.), along with reviewing your savings (including any potential EQUITY in your existing home).
- Once your application has been submitted & you have been pre-approved. You will receive a call from the lender to review your GFE (Good Faith Estimate) and talk through your New monthly payments as well as your Existing monthly payments on your current home.
Information Needed for SELL side: Preforming a Market Analysis
- We will begin this process by preforming what is called a 2 Part Market Analysis i.e. An evaluation of your Properties Current Value!
- Part 1: For this 1st appointment… I will schedule a time to visit with you at your property to walk the grounds both inside and out. During this walk-through, I will take a number of photos (only for reference sake), and talk to you about any changes (good or bad), updates, or renovations that may have taken place during your time of owning this property. The 1st appointment will last between 20 to 40 mins on average.
- Part 2: For our 2nd appointment… I like to schedule a ZOOM call (online video/screen sharing service) to discuss all of the information gathered during Part 1 and present all of my findings. This will be done through a detailed & comprehensive Analysis of your home. The 2nd appointment will last between 1 to 1.5 hours on average.
- The reason for the 2nd appointments longer length is that we will be discussing several other topics beyond just the value of your home.
These topics will include:
- Marketing strategies
- Commissions & other fees associated with selling your home!
- Repairs OR items to update.
- Touch on: Timelines/expectations (Info. gathered from seller questionnaire)
- Cleaning & staging
- Photo shoot & sign installation
- Once this meeting is over. Clients are given a few days to talk amongst themselves before determining how they would like to proceed?
- Now that both tasks have been completed it is time explore Option 2: Sell 1st/Buy 2nd
Exploring Option A: Buy 1st/Sell 2nd
- In this option Time is on your side. This means you will have longer to identify your next property and far less pressure to feel the need to simply purchase for the sake of purchasing.
- You will also need to ensure that you Qualify to purchase your new home while Still owning your existing home? This is why it is important to get pre-approved. The lender will review debt ratios & factor in All Existing & New Payments to help you understand this question.
- Where will the down payment funds/money be coming from for your next home purchase? Just like your 1st purchase (Family, retirement accts & savings are great options), but Equity in your existing home may also be a source that can now be explored.
- ***NOTE: If the equity in your home is the only option described above. We would need to review the Market Analysis I performed for you to verify there is enough equity to take out of your existing home.
- This would require an additional step of applying for a BRIDGE LOAN (A way to access existing equity in your home for a certain length in time). Most lenders allow a maximum of 80% LTV (Loan to value)
- Example: Home value $500K Current Loan balance $350K, 80% of $500K = $400K. Difference of $50K which is the amount of equity you would have access to upfront (prior to selling your home) that could be used for a down payment on a new home.
- Finally, including your down payment, do you also have ADDDITIONAL funds to cover ALL other expenses over a stretch of time i.e. cash reserves in the event your current home does not sell immediately?
Exploring Option B: Sell 1st/Buy 2nd
- Unlike option 1, TIME is not necessarily on your side. In this option you will likely feel added pressure to find something more quickly. This could result in additional sacrifices towards your next home.
- It may also require some additional planning for the possibility of having to have find a short-term living arrangement or a place to house your personal belongings.
- The benefit of this option is it does take away need for qualifying financially for both homes. Additionally, this takes away the burden of any extra down payment funds, cash reserves, or any other expenses that may occur if the home does not sell immediately.
It's time to choose an Option...
- If choosing Option A, simply Click the button below and you will continue on to Step 3 of the Move-up Buyer Process.
- If choosing Option B, simply Click the button below and a new window will appear as you are redirected to Step 3 of the First Time Home Seller Process