What are homes actually selling for right now – stick to the data
Start with researching what you want to buy, but look at the houses you would have bought if they had not sold already. Sounds crazy, but the sale price is the actual data you need to get started. Focus on this first before looking at asking prices, CV and online algorithms. While you are at it, also look at the sales data for the house you currently call home, even if you are planning to keep it as a rental investment. This may become important later, if you decide to spend more.
Get to grips with the numbers, repayments and other costs
Early on the in the process, talk to a good financial adviser (like us) to get a handle on what you can borrow and how much it will cost. Apart from getting a handle on loan repayments, get to grips with the other costs involved. Such as break fees for the current home loan and real estate agent fees. Add buffers to the buy and sale prices, as in put in a higher price than what you want to spend and a slightly lower price for the one you want to sell. This is to get a feel for the worst case scenario in terms of the end home loan. This will give you a good understanding of the actual costs of falling in love with a dream house.
Think about where you are willing to compromise
This is important if there are two people involved. Everything has a price, but the price is generally based on the suburb, the size of the land/house and the quality of the house . Get on the same page on what you could actually be flexible on and what might be bottom lines.
If you are selling the old one, tidy it up a bit
Remember there is a whole industry around doing up properties and selling them. So a little bit of a tidy up – especially on the big surfaces, carpet paint etc can go a long way. Oh and if you can’t keep it neutral and want to explore taking risks by exploring your nack for interior decorating – don’t. Remember the idea is to appeal to the biggest pool of buyers.
Less buy and sell conditions are better
Of course checking the property out that you are buying is vital. But when trading up try and avoid buy and sell conditions which might limit the pool of potential. Buying conditional on selling or selling conditional on buying can mean that both prices are affected, so do this only if you do not have another choice. Which brings me to the next tip – remember you can use Air BNB and storage to avoid having to line up dates between buying and selling. Spending a few thousand here could mean that you open up things to a bigger buyer pool. This in affect could achieve a lot better price.
