Durbanville Property: 6 Mistakes When Trading Up #3
6 Mistakes to Avoid When Trading Up to a Larger Home
Introduction:
Unlike the experience of buying a first home, when you are looking to move up, there are certain factors that can complicate the situation.
It is very important to consider all of these issues before you list your Durbanville property for sale.
Not only is there the issue of financing to consider, but you also have to sell your existing home in order to trade up to a bigger home.
You need to sell your existing property in Durbanville at exactly the right time to make this whole process work. Also, you have to have the necessary finance to ensure the whole process runs smoothly.
The biggest dilemma could also be where you possibly own two Durbanville properties at the same time (which is not always the best thing to do) or where you can actually have no home to stay in at all while the registrations are in process.
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 have already sold your Durbanville property, you can buy your next one with no strings attached.
If you do get a tempting offer on your home but have not 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 will have to investigate the tax rules (Capital Gains Tax) 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 pre-approved bond
Pre-approval is a very simple process that many homeowners fail to take advantage of.
While it does not cost or obligate you to anything, pre-approval 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 pre-approved bond, your offer will be viewed far more favourably by a seller - sometimes even if it is a little lower than another offer that is contingent on financing.
Do not fail to take this important step.
For further information on Durbanville property, contact Pieter Kotze on 083 260 1932, or e-mail him at pieter@pieterkotze.co.za
by: Pieter Kotze
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