Even if this is not your first real estate transaction, there are still a few things that can complicate your life. Maybe some of these factors did not cause any problems during the first transaction but you should not neglect anything during the second transaction.
Not only do you have to think about the financing but you have to sell the house that you currently own at the right time in order to avoid the financial burden of two houses, or worse, the dilemma of having nowhere to live while the two transfers of deed are taking place.
In this document, we highlight the five most frequent mistakes owners make when buying a new property. Knowing these mistakes and the strategies to avoid them will help you make informed decisions before putting your house for sale.
You should plan to sell before buying. Then, you will not find yourself in a weak position at the negotiation table, feeling obliged to accept an offer lower than market value because you are facing purchase delays. If you already sold your house, you can buy your new house with peace of mind. If you receive an interesting offer for your house but did not start looking seriously for another one, you can insert a provision in your promise to purchase to make it conditional to buying another house, thus giving you some additional time. If the market is weak and you find that you can’t sell as fast as you thought, you can rent your house and put it back on the market later, particularly if your house is small which is ideal for a first time owner. In this case however, don’t forget to get information on the tax impact of such a decision.
Several owners ignore the considerable benefit of a pre-approved mortgage. It does not cost anything and there are no obligations. It gives you an important advantage because you know your acceptable price range while looking for a house, but more importantly, it confirms to the seller that you have the required funds to buy the property. With such an advantage, your offer will be perceived much more favorably by the owner seller, even if your offer is slightly lower than the one of a non-qualified buyer. Don’t miss such a valuable opportunity.
With two major transactions to coordinate and all the people involved (mortgage brokers, notaries, building inspectors, real estate brokers), the risk of miscommunication and oversights increases considerably. Make sure you collaborate closely with your broker to avoid a logistic nightmare.