Congratulations. Things are pretty good in your world and you’re now able to move out of the starter house you bought several years ago and into something bigger and better.
Bet we can guess what you’re thinking: This time you’re going to have all the nifty stuff you’ve been doing without: a fireplace, oak kitchen cabinets, big-time storage, a red whirlpool tub.
Well, hold it on the red whirlpool tub for a few minutes.
Even though you’ve bought a house before, the move-up marketplace differs vastly from what the first-timers meet up with. Recently we asked a panel of real estate professionals to explain the differences and to offer their best advice to move-up buyers.
-Consider the home’s resale value. Even if you are absolutely, positively sure you’re shopping for your “forever” house, give some thought to market appeal. Circumstances may change and you could get stuck with a home so unique very few people want it.
“The person who says he’s never moving again is the same one who ends up getting transferred to California next year,” says Frank Larson of The Prudential Preferred Properties in Glen Ellyn. “Do your own thing but keep some reasoning to it.”
Dick Post of ERA R.M. Post Realtors in Tinley Park agrees. Statistics show you’re more likely to move than stay, he says. Choose amenities that a majority of buyers in that price range will look for, including master baths or suites, family rooms, great rooms, fireplaces, new or remodeled kitchens, central air conditioning and three-car garages.
City buyers like large windows, formal dining rooms, large closets and storage areas and a piece of outdoor living space such as deck or patio, says Bettylou Taradash of Sudler and Co.
“In the final analysis, it’s an investment,” she says.
-Scope out the neighborhood. Who knows? Maybe you will be living in your next home for years and years. Before you make an offer, do some exploring beyond the lot lines.
“Look at the shopping, neighbors, schools and churches–everything that is going to be a part of your life,” says Taradash.
The quality of the school district is important not only for your children but also for resalability, says Post. He also advises finding out if the district you’re considering moving into will be building schools in the near future.
“If it is, your tax structure will be altered dramatically,” he says. “Most times schools represent the largest portion of a tax bill.”
-Don’t put all your money into a house. The big salary increase or bonus checks may not be permanent.
“When people make themselves mortgage poor, we see homes coming back on the market,” says Sandy Heinlein of Baird & Warner Real Estate in Palatine. “They qualify on the husband’s and wife’s salaries and then they have a couple of kids and then we see people with $20,000 on their Visa cards. I tell people to use one check to pay the mortgage. That way if someone doesn’t have a job anymore, they can still live.”
Buy the space you need but don’t hurt your lifestyle, says Post. “Don’t buy a 4,000-square-foot house when 2,800 square feet is adequate. It’s not just the price but the payments as well. We see people make a quantum leap beyond what they need and it sometimes comes back to haunt them when they’re stretched so far on payments they don’t have money for other enjoyable things.”
-Tote a tape measure. First-timers often have little furniture. They buy it later to fit the space they own. Second owners have acquired a greater number of possessions or are possibly merging households, says Taradash.
“They’ve got to examine space more carefully, especially if they have large pieces,” she says. “I’ve often told people to measure their present space and carry (the numbers) with them so they have a way of relating to what they’re looking at. Space can be deceiving depending upon how it’s decorated.”
-Timing closings and possessions is trickier. Because moving up entails buying one property and selling another, more coordination is needed among the schedules and finances of more people.
“A first-time buyer can say, `I’ll look at 10 houses this weekend,’ and life gets busy and you look again in a month,” explains Tripti Kasal of Beliard, Gordon & Partners in Chicago. “Move-up buyers are timing two things. Most of the frustration I see is when people have found something and can’t sell in time or vice versa, when they don’t have time in their busy lives to find a house and make a quick decision.”
Unfortunately, there isn’t a right answer for everyone. One or the other is going to occur first. You’ll have to focus on getting the other done.
“It will help a lot if people understand when their house goes under contract (that) they may have to spend several days all day to buy a house,” says Kasal. “To sell theirs, they should price it close to what the market will bear and maybe look at the first offer even if it’s not the amount you might be able to get if you had a little more time.”
Another suggestion, she adds, is to be willing to move twice.
“In the long run that may be a better answer than rushing into buying something,” she says.
An offer contingent upon the sale of your own house may or may not be acceptable to sellers, says Prudential’s Larson. It would not in locations where double and triple offers are common. Outside the hot spots, move-up sellers are often prepared by real estate brokers that their buyers might very well be someone with a house to sell.
“The best offer is a quick closing cash sale but that’s not always the easiest thing to do,” he says.
-Avoid buying or creating the most expensive house on the block.
“If you do, your house won’t comp out real well,” says Heinlein, referring to how your house will stack up against comparable properties that have sold recently in your area. “In this area, most people buy in a subdivision and you can only push the price so high. If there are four models on the same block and you put in all the bells and whistles, you’re not going to get your money back.”
She tells her sellers to put in a minimum of upgrades, she says. “Put in what you need to live in. If you finish the basement, finish the basement but don’t make it state of the art.”
-Don’t over-decorate. It might be tempting to have the kitchen appliances painted mauve or the ceilings black. Resist such urges, say the pros.
“You want to make the home your own but not so much that no one will want to buy it,” says Larson. “Certain things like putting the family room on the second floor would not be a good idea.”
“White and off-white are universal,” says Taradash, who recommends staying away from strong colors. “Stay simple and open and airy. You might like to have a big red bathtub but don’t do it.”
