We all wish we could be a seller in a sellers’ market, and then turn and be a buyer in a buyer’s market. Unfortunately, we seldom get the best of both worlds. A first-time buyer who is entering the housing market from the rental market has an advantage in that they don’t need to sell a home before they buy one. Similarly, a last-time seller who is leaving the real estate market, such as a couple who is selling their house to enter a retirement community, has an advantage because they don’t have to purchase a home after selling. The catch is that these buyers and sellers aren’t stepping into the other role after they complete their transaction. Most of us will be selling and buying homes in a market that favors one side of the sale.
Eugene’s current real estate market challenges buyers. They fear overpaying or over-compromising in their choice of homes. In contrast, sellers are enjoying appreciation of prices, abundance of buyers and minimal competition of other homes for sale. For this reason, sellers who will also be buying must heed the advice of author Stephen Covey and “begin with the end in mind.” They must have a clear, realistic vision of their replacement home.
Plan for your replacement purchase
What does success look like for you in your new home? This discussion is not about how many bedrooms and baths you want. It is a discussion of what change in lifestyle you want to achieve. Will success be achieved in simplifying your life with a smaller space? Less house means less to maintain, freeing up your money and time. Or do you envision finding a long-term home in which you will raise children? This home may include amenities like a built-in theater room to entice your teenagers to hang out at your house. Or it could have a dining area big enough to accommodate extended family seating at holiday dinners. By defining your lifestyle goals, you will find that your search parameters fall into place more easily for finding your dream home.
Review your finances and recent housing market sales
Reviewing your financial capacity is essential before starting your search for a new home. Your Realtor can assist you in assessing the value of your current home and help you understand the cost to sell. A lender can then help you understand your borrowing capacity. Once you have assessed your financial resources for purchasing a new home, commit to only looking at homes within your financial reach.
Next, look at the real estate market and verify that the type of home you want is available. Approach this step with caution. Your goal here is not to find your next home. Your goal is to verify that your expectations are reasonable. Many people go house hunting before selling their home and find a new home they love. It’s always great to find your dream home, but you may not have the buying capacity to complete the purchase of the new home until you sell the one you have. This can be heartbreaking because sellers will not wait for you to sell your home. In a strong buyers’ market that may be an option, but not today.
A Realtor can help you research
With the help of a Realtor you can see all sales activity for homes similar to yours over the past year. This is an excellent exercise to acclimate yourself to your marketplace. Have other buyers been successful at what you are trying to accomplish? How many homes have sold that would have worked for your family? How long did it take for these homes to sell? Are the sellers of homes like these negotiating off their list prices? Have the prices for these homes increased over the past year? Once you have these questions answered, and you feel confident that there are homes in the marketplace that are a good fit for you, then you can turn your attention to the home you need to sell.