Unlike the experience of buying a first home, when you're looking to move-up, and already own a home, there are certain factors that can complicate the situation. It's very important for you to consider these issues before you list your home for sale.

Not only is there the issue of financing to consider, but you also have to sell your present home at exactly the right time in order to avoid paying for two homes or, just as bad, the dilemma of having no place to live during the gap between closings.

Six Strategies

In this report, we outline the six most common mistakes homeowners make when moving to a larger home. Knowledge of these six mistakes and the strategies to overcome them will help you make informed choices before you put your existing home on the market.

1. Rose-coloured glasses

Most of us dream of improving our lifestyle and moving to a larger home. The problem is that these's sometimes a discrepancy between our hearts and our bank accounts. You drive by a home that you fall in love with, only to find that it's already sold or that it's more than what you are willing to pay. Most homeowners get caught in the hit or miss strategy of househunting when there's a much easier way of going about the process. For example, find out if your agent offers a Buyer Profile System or “House-hunting Service,” which takes the guesswork away and helps to put you in the home of your dreams. This type of program will cross-match your criteria with ALL available homes on the market and supply you with emailed information on an on-going basis. A program like this helps homeowners take off their rose-coloured glasses and affordable, move into the home of their dreams.

2. Failing to make necessary improvements

If you want to get the best price for the home you're selling, there will certainly be things you can do to enhance it in a prospective buyer's eyes. These fix-ups don't necessarily have to be expensive, however even if you do have to make a small investment on improvements, you are likely to get your money back, and then some, with an increase in your house's price value. It's very important that these improvements be made before you put your home on the market. If cash is tight, investigate an equity loan that you can repay on closing.

3. Not selling first

You should plan to sell before you buy. This way you will not find yourself at a disadvantage at the negotiating table, feeling pressured to accept an offer that is below-market value because you have to meet a purchase deadline. If you've already sold your home, you can buy your next one with no strings attached. If you do get a tempting offer on your home, but haven't made significant headway on finding your next home, you might want to put in a contingency clause in the sale contract which gives you a reasonable time to find a home to buy. If the market is slow and you find your home is not selling as quickly as you anticipated, another option could be renting your home and putting it up on the market later – particularly if you are selling a smaller, starter home. You'll have to investigate the tax rules if you choose this latter option. Better still, find a way to eliminate this situation altogether by getting your agent to guarantee the sale of your present home (see point number 5 below).

4. Failing to get a preapproved mortgage

Preapproval is a very simple process that many homeowners fail to take advantage of. While it doesn't cost or obligate you to anything, preapproval gives you a significant advantage when you put an offer on the home you want to purchase because you know exactly how much house you can afford, and you already have the green light from your lending institution. With a preapproved mortgage, your offer will be viewed far more favourable by a seller – sometimes even if it's a little lower than another offer that's contingent on financing. Don't fail to take this important step. (Note: Don't be fooled by a bank saying you are "pre-qualified". That is a term used to simply say the bank has agreed to work with you. it does NOT mean your application for a mortgage has been accepted.)

5. Getting caught in the “Real Estate Catch 22”

Your biggest dilemma is deciding whether to buy or sell first. Point number 3 above advises you to sell first. However, there are ways to eliminate this dilemma altogether. Some agents offer a Guaranteed Sale “Trade-Up” Program that actually takes the problem away from you entirely by guaranteeing the sale of your present home before you take possession of your next one. If you find a home you wish to purchase and have not sold your current home yet, they will buy your home from you themselves so you can make your move free of stress and worry.

6. Failing to coordinate closings

With two major transactions to coordinate together with all the people involved, such as mortgage experts, appraisers, lawyers, loan officers, title company representatives, home inspectors and/or pest inspectors, the chances of mix-ups and miscommunication go up dramatically. To avoid a logistical nightmare ensure you work closely with your real estate agent.

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Six Mistakes To Avoid When Trading Up To A Larger Home

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