From time to time, I ask professionals that we refer business matters to, to take the opportunity to share their expertise with you via our Blog Posting.
This week, John Kruk, a leading Realtor with RE/MAX House Values 4 in Hackettstown, New Jersey shares his perspective on navigating the home sale.
John's contact information appears below and if you're in need of a Realtor, well frankly, John's the guy to go to. You can feel free to contact him directly or, simply reach out for us either via our website or call at 908-223-1496 and we'll make sure that both you and John get together.
Many folks that currently own a home and need to downsize or upgrade often ask me if it is even possible to time the sale of their home and purchase another at the same time in the current market. My answer is almost always “of course you can”. There are some steps you must take, and doing some upfront planning between your financial advisor, mortgage lender and Realtor will determine how possible it is to move forward with your plan.
The first part of the planning phase involves finding out if there is a suitable place for you to go. Speak with your Realtor about what you have in mind for your next home and they can provide you with the listings for homes that meet your needs. If you are satisfied at that point with your options, you will need to know the marketability and suggested list price for your home. You need to get an absolute bottom price that your agent thinks will move your home (for planning purposes), to see if you are willing to go that low if you must. With an estimated purchase price for your home, along with an idea of what you are willing to spend on your next home, you can now speak with a mortgage professional to see if the deal can come together financially.
Having been in your shoes just a few years ago myself, I can speak personally about another avenue that you need to look at. My mortgage loan officer (Bob Deiorio with Residential Home Funding) recommended an option that I was trying to avoid…renting out my current home and purchasing my next property. In this market, doing that can make you just as marketable to a seller as any other buyer. After your agent shows you what your home can generate in rental income, you can then see if it is feasible to become a landlord. This option is quite popular with growing families that need to get into a larger home, but have negative equity in their current home. Even if you are slightly negative on cash flow from the property at the end of the year, it still might make sense for you to purchase your next home now, while rates are still amazingly low and rents are continuing to climb.
If renting your current property is not a valid option, the next move is to tour some of the homes you are interested in to make sure you are interested in making the move. After satisfying that requirement it is time to get your home listed. If you are planning on selling and buying at the same time (or within a week or so) you need to be aggressive with your list price and marketing plan. If you hit the ground running with a list price at the point where your home will appraise, along with flooding the internet sites, print media, and other forms of real estate marketing (i.e. electronic signage, agent-to-agent notification, neighborhood canvassing, etc.) you should get interested buyers going through your home.
There is still adequate inventory in the current market to offer you several choices in your next home. I still find my buyers weighing which home they want to write an offer on and having a tough time doing so. Thus you shouldn’t worry about not finding your next home as much as you should concentrate on finding a buyer for your home. If you end up getting a buyer sooner than you find a home I would say you are in a good position and will gain the upper hand in negotiating your purchase. If it is the other way around we are finding the sellers being not as willing to work with you as well as if you already had a buyer lined up for your home. So I tend to coach my clients in this situation to wait until their home is “under contract” prior to negotiating on their next purchase. It will make the situation much more fluid and save you aggravation, and of course, money.
The key point I am trying to make with this article is that nothing is impossible in today’s market, despite what national media outlets are saying. The main factor is having a plan (in writing) that shows you how you will get from your current home to your next, with the least amount of stress, wasted assets, and on your timeline. The worst angle to take would be to either just start looking at homes on a whim without giving thought to your current home, or to just throw your home on the multiple listing service without knowing how you are going to complete your next transaction. Good luck on whatever real estate endeavors you are going to partake in and try to enjoy the ride.
John Kruk is an award winning Broker-Sales Associate with RE/ MAX House Values 4 in Hackettstown, NJ. John has many innovative ways of getting you to closing even if you have a home to sell first. He can be reached on his cell at (908) 343-5328 or at his office at (908) 852-1333