Planning to sell your home and buy a bigger property? Here’s what you should do

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As you grow in your career and your family expands the need for a larger space to live in becomes necessary. While buying the property itself is tough keeping in view the costs and the procedures involved, buying a bigger house if you already own a property and are living in it becomes an even bigger task. Here are a few tips which may make the transition slightly easier.

When to sell existing property?

This is a tough call. It is difficult to decide whether you should sell your existing property before or after the purchase of your new property. However, once you have made up your mind to shift, you should start scouting for buyers for your existing house. You may be better placed if you are able to find a buyer for your existing property before you yourself seal the deal for a larger home. Selling existing property first has its own benefits. It gives you a reality check of the property market. Often property owners overestimate the value of their homes.

Clearer picture of finances

Selling your existing property will also give you a clearer picture of your finances. Having the money in hand will make you decide the amount of loan that you can avail after the large down-payment that you will be able to make now. In fact, you may be able to plan a larger new home than you had initially planned for. If you have factored in the money you might get from selling the earlier house as part of the finance for the new property, not being able to find a buyer for your property or having to sell at a price lower than you estimated, might put you in jeopardy. Getting done with selling the earlier property will help you to avoid this stress.

Easier home loan approval

If you are able to get a sizable amount by selling your earlier property, it will help you to get a better deal with the banker. The extra money in your account can be added to your down payment and may help you to get a larger loan if needed. In case you have decided on the new property and its price, a large down-payment will also keep your loan amount low and consequently your monthly EMIs will not pinch you as much. Also, since you are making a sizable down-payment using the sale proceeds of your old house, your lender will process your loan more easily.

Better placed to negotiate

If you are able to sell your existing house before buying the new property, you will have a chunk of cash in your bank. Having a large sum in hand will always put you in an advantageous position when you are at the negotiating table for buying your new home. The seller or developer sees you as a serious buyer. They don’t mind offering you a discount as you can close the deal quickly.

Make interim arrangement

However, while doing the deals – sell and buy – you should ensure that you are not stranded without a home of your own. If there is a time gap between selling your earlier property and buying the new one you may ask the buyer for time to vacate. You can in fact offer to pay some rent during the interim period till your new house is ready to move in. If the buyer is an investor and is not buying the property from you for self use, then he/she will happily let you stay for rent.