Trading Up to a New Home

It will be a record breaking year for home purchases in Ontario according to OREA and CREA. Many of these purchases are current homebuyers trading up to a different home. It may be for a larger home or condo in Mississauga or perhaps they're moving north or to Florida. Real Estate prices are expected to rise so a larger home in an exclusive neighborhood is bound to appreciate more than your current home. Trading up may be a smart investment, just as smart as home renovation and house flipping.

There are risks in trading up, particularly right now when home availability is shrinking. If you buy another house before you sold your current house, you may get stuck financing two mortgages. Getting some professional help from a real estate agent might help you avoid a couple of extra mortgage payments or having no place to move to and store your possessions. To avoid this embarrassment (which many people trading up actually have happen to them), you need to make your purchase contingent on the sale of your old home. This makes the transaction complex, particularly when the seller might alos have their own upon-sale contingency based closing contract.

In the current market, you're in a weaker position buying than selling. There is good demand for your property although buyers are price conscious. Availability of properties will continue to decrease which means you may end up paying a lot more than you hoped for and the new home may not have all the features you want.

Contingency Based Sales Agreements

You can include a contingency clause on your offer for a home so that the closing on your purchase of the new home won't occur unless you sell your current one. We can help you understand and create a contingent clauses with regard to your purchase.

Other Contingencies

The purchase contract can have other contingencies such as whether you can obtain suitable mortgage financing, satisfactory home inspection results, and the completion of certain repairs in the home. Contingencies can encourage sellers to fix the home before handing over to you.

The best decision you can make when trading up to a new home is to have an experienced real estate agent help with the planning and purchase transaction. Real estate is more complicated than ever and going it alone could have a significant downside. Call us today about your real estate needs.