We hear about first time home buyers, buyers of 2nd homes, older people obtaining reverse mortgages… but what about “first time sellers”? The housing market has been heating up in many areas, especially as the weather improves, and buyers complain that there are too few properties to purchase, prices are high, rates are low and demand is rabid. So what is stopping an owner from selling their house today and moving on to the next one?
A high cost transaction can be very intimidating for a first timer, especially in a market such as this one. Borrowers are educating themselves about the process so that they can approach selling their house with confidence. Sellers should investigate what they can afford once they sell their current home, or if it is possible for them to purchase without having first sold: buying power. A qualified mortgage advisor will walk them through the steps and options. Many people discover that they can qualify to make a step up in housing without having their current home sold, which gives them a lot more flexibility because they can buy before they sell.
The loan officer can also inform the seller of the costs of obtaining a new home loan, what programs are available, a general time line, what is required for underwriting, and common mistakes that are made. These include unrealistic expectations, trying to obtain new credit cards or debt prior to buying another home, and so on.
Once a potential seller understands their buying power and the process, they should meet with a realtor for the selling side and the buying side to determine a pricing strategy for selling and a timing strategy for buying. They should know what their buying power will obtain, and study communities where they are likely to purchase. The listing agent for a house will tell the owners to clean up, spruce up, and stage the house for sale, give the first time seller a timeline, and discuss the possibility of renting after a house is sold. Inventory is tight in many areas, so if a buyer falls in love with a house they will work with the seller’s time frame.