Real Estate: Is It Smart To Buy Before You Sell?

Deciding the right time to enter the real estate market is a major financial decision, and it’s even trickier if you already reside in a home. If you’re planning to sell your current residence and move into another, you have an important choice to make. You don’t want to pull the trigger too early and risk needing to move out before securing a new home. However, you also might not want to be responsible for the cost of two homes for however long it takes to sell your current place. So when it comes to this aspect of real estate, you might wonder if it’s smart to buy before you sell, or vice versa. The answer depends on your financial situation, risk tolerance, and local market conditions. Let’s explore the nuances so you can make the best choice for your situation.

The Appeal of Buying First

Securing a new home before you sell offers clear advantages. It removes the pressure of finding a new place to live while under contract with a buyer. You can move on your own schedule, avoiding the need for temporary housing or rushing into a purchase you might later regret. It lets you take your time to find a home that truly fits your criteria. It also means you can make a strong, non-contingent offer on a property you love, which is a powerful negotiating tool in a competitive market.

Financial Risks To Consider

The primary challenge of buying first is managing the financial load. Carrying two mortgages, even for a short period, can strain your finances. You will be responsible for property taxes, insurance, and maintenance costs on both homes.

To manage this, many people use a bridge loan. This is a short-term advance that covers the down payment on the new property until your current one sells. You can also try a Home Equity Line of Credit (HELOC) on your current residence. Both options come with interest costs and require a strong credit profile and sufficient home equity. You must assess your financial capacity to handle these extra costs.

Market Conditions That Factor In

The state of the housing market plays a big role. In a seller’s market, where homes sell quickly, buying first is less risky. You can be reasonably confident your current home will sell in a timely manner. 

In a buyer’s market, however, your home could sit on the market for quite a long while. This extends the financial burden of owning two properties. 

A well-researched market analysis is essential before making a move. And remember that you should never list your home in a hurry; proper timing and strategy will save you many regrets down the road.

Final Considerations

Before you decide if it’s smart to buy before you sell, speak with a financial advisor and a real estate professional. They can provide a clear picture of your financial options and what to expect from your local market. A careful evaluation with their help will indicate if you are in a strong enough position to manage the process of buying before selling. Overall, this path offers convenience and leverage but requires careful financial planning to mitigate the risks involved.

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Home Improvement Projects That Will Increase Your House's Value

If your kids have recently moved out of their childhood home, you are planning to sell in the near future, or you are looking for some projects to embark on, perhaps it is time to get started on a home improvement project or two that will increase your house's value. You can choose to work on many of these projects yourself, or you can hire a professional to attend to needs outside of your comfort zone.

Consider a Garage Door Replacement

How old is your garage door? Is it getting rusty, is it not working properly, or is its color outdated or covered in dirt? Perhaps it's time to consider a garage door replacement. With diligence, this project can take only one day to complete. You can purchase a garage door, a garage door kit, and other materials you will need to complete the project at a home improvement store. Be sure to enlist some help with removing the old door and installing the new one so you don't get hurt.

This project can cost up to $2,000 if you do it yourself, and you will likely get most of that back when you go to sell your home down the road. You can also choose a nice color for your new garage door that complements the colors, ambiance, and style of your home.

Finish Your Basement

Another project you can work on yourself is finishing your basement. If you use it as a space for storage, you can still do so once it's finished. For prospective buyers in the future, having a finished basement that allows a family to choose how it's used is a wonderful benefit that is highly sought in the real estate market.

Before you get to work, you may want to invest in a proper professional inspection for mold, moisture issues, and water issues. You don't want your basement to be contaminated or unable to hold in moisture after redoing it. Finishing your basement includes sealing the walls, installing foam board sheets, building the walls, and much more. Alongside research, you can find videos online to help you through this process. Since videos are growing to become one of the most popular ways of consuming content, with YouTube having over 2 billion visitors every month, there are dozens of basement DIY videos to follow. This project will take some time, so be prepared and perhaps enlist some help from a handy family member or friend.

Consider Building a Deck

Do you have extra space in your backyard? Consider building a deck to increase your home's value. Surely you and your family will enjoy time relaxing on it, too.

Building a deck can take anywhere from one week to one month depending on how big you want it, how much time you have each day to work on it, and how much help you can get building it. This job is labor-intensive and will require much attention to detail. The average cost of building a deck is between $5,000 and $10,000, depending on how large it is. However, you will gain much of it back when your home is sold in the future. Get an excellent and reliable concrete contractor in Orange County CA or somewhere near you to get it done beautifully. Many families seek decks for pools and for extra sitting space outside, so this project is well worth it.

Embark On a Minor Kitchen Remodel

14% of homeowners planned to make improvements to their kitchens in 2018. Are you next? A minor kitchen remodel costs a fraction of a full remodel, around $20,000, and will help increase your home's value. You can also expect to recoup about 70% of that cost after you sell your home in the future, making it a worthy investment.

First, consider repainting the walls and cabinets in your kitchen. This low-cost task can brighten the room and completely transform its look. If your kitchen cabinets are old, consider entirely replacing them. A new set will make your kitchen look great. Then, look into purchasing new, energy-efficient appliances for your kitchen. These simple projects will increase your home's value and transform the overall look of your kitchen for the better.

Deep Clean Your Home

A simpler project you can easily embark on is deep cleaning your home. This includes sweeping, mopping, vacuuming, dusting, and utilizing tools to reach and clean every corner of your house.

Another aspect of this project may include deep cleaning systems and appliances in your home, such as your oven, chimney, fireplace, and heat exchanger. If your oven isn't self-cleaning, it should be cleaned once every three months or so. Manufacturers suggest cleaning chimneys and fireplaces once a year and heat exchangers a minimum of once every five years. These pieces in your home are important to clean for the safety of your family and the overall health of your home.

Consider taking on one or two of these projects if you would like to increase the value of your home. Whether you plan on selling your house in the near or distant future, it's not a bad idea to get a head start on improving and adding onto parts of your home. Not only will future prospective buyers appreciate what these projects have to offer, but you will be able to enjoy them, too.