Trade Up Your Home in 2024
What You’ll Learn in This Video
[01:53] 2 Keys to Trading Up – Time & Talk
[04:37] Navigating the Current Market
[27.22] Making the Money Work
[59:02] Steps to Trade Up Your Home
[01:07:48] Pro Tips for Trading Up Your Home
Related Reading: 10 Ways to Lower Your Mortgage Payment
2 Keys: Time and Talk
Give yourself as much time as possible. Start now even if you’re not 100% sure you’d like to move forward. You can never begin too early if you’re considering selling your home and buying a new one in the near future. You’ll need time to prepare your finances and your home.
We recommend talking to a trusted lender and real estate agent well in advance of your potential move. They can provide vital insight and help you come up with a personalized strategy that works best for your situation. Many people think that they shouldn’t reach out until they are 100% positive they are moving forward. This simply isn’t the case: trusted industry professionals can help you strategize early in the decision making process so you can make smart choices for your personal situation.
Navigating the Current Market
Real estate numbers so far for 2024 indicate that the market is picking up after a slow 4th quarter in 2023. Starting in mid January, the Colorado Springs market saw an increase in pending contracts, showings, and inventory. It’s not unusual for the Pikes Peak region to pick up after the holidays, but the bump in inventory and some of the lowest mortgage rates since May 2023 had buyers coming out earlier and faster than usual.
Additionally, we’ve already had several clients reach out about listing in the next couple of months. Many homeowners who have been holding onto their 3% interest rates are finally ready to make a move with the anticipated mortgage rate drops for this year. This could help boost stagnant inventory and further invigorate the market activity.
- It’s too hard to sell right now: Strategically priced and well prepared homes are selling. Average days on market in December was 46. Depending on the price and condition of the home, sellers should expect to be on the market about 30 days before getting an offer.
- It’s better to wait until interest rates go down: Everyone’s personal situation varies, but it could be advantageous to buy now before the rates drop. You’ll be more likely to be able to take your time, negotiate for seller concessions, and get a house at a lower price than later this year. We anticipate the real estate market to flood with buyer competition when the rates drop.
- Interest rates will drop back down to 3%: It’s not likely that interest rates will dip back down to 3% anytime in the near future. In the meantime, home values are predicted to continue steadily increasing.
Making the Money Work
One of the challenges of buying and selling a home at the same time is that you likely have equity tied up in your current home. Speaking with a lender early in the process can help you discover financing options that can make this aspect of trading up a little smoother. Here are some options that Kim Majors mentioned during our webinar:
- Contingency vs Non-Contingency: A contingency is a contract feature that states a certain requirement must be met by a specific date. If you need to sell your current house before you can close on the house you are buying, you’ll need a contingency included in your offer. Speak with your lender and real estate agent to strategize if the current market will allow for a contingency.
- HELOC (Home Equity Line of Credit)
- 401k loan/line of credit on investment fund
- Start with a lower down payment & recast later
- Bridge loan
- Utilizing current home as rental property (lease income can help with qualifying)
We can’t emphasize enough how important it is to speak with an experienced lender who can guide you through different options that might be available to you.
Steps to Trade Up Your Home
- Talk to a lender and real estate agent as early as possible
- Prep current home for selling
- Meet with Susanna for a specific home prep plan
- Pre Inspection
- List current house for sale
- Shop for new home
Pro Tips to Trade Up Your Home
- Give yourself plenty of time
- Preplan as much as possible
- We have systems in place to help you every step of the way
- We can connect you to industry partners to make life easier during this process (stagers, house cleaner, handyman, etc.)
- Be financially ready to carry two mortgage payments if contracts get delayed, etc.
- Backup Plan: assume that you won’t have back to back closings. Don’t schedule movers for day of closing.
- Avoid closing on a Friday or in late afternoon. If closing is delayed you could have to wait until Monday.
We have plenty of resources for you as you continue your research. Remember: it’s important to start your conversations with a real estate agent and a lender as soon as possible, regardless of how long your timeline is.
Susanna Haynie, REALTOR
- Owner/broker of Colorado Real Estate Group
Kim Majors, Vice President | Mortgage Loan Originator
- Bank Central