Buying your next home: 8 tips to upsize the right way
If Covid has created one positive change, that is a boom in the real estate market. Many people are reconsidering their living arrangements. The market is hot with people looking to buy their next home, and for many this means considering to upsize their home or property. We connected with Krista Lapp, an award winning realtor based in Coquitlam, BC for her best tips on how to upsize the right way. Buying your next home: we have 8 tips to upsize the right way.
After living in a starter condo or home, many people want to move to a bigger space – weather it is to accommodate a growing family, looking after elderly parents or possibly just moving out of the city for more land, we invite you to review our eight tips before leaping into a bigger property and probably a bigger mortgage. There are lots of elements to consider.
1. Check on your purchasing power
Speak with your mortgage broker or bank to find out how much you qualify for a mortgage. Having this information is important and it provides a guideline how much you can spend on your next home. An evaluation of your current equity will help to determine how much you can upsize without putting a strain on your monthly budget.
You will also need to know your down payment obligations and determine where your down payment is coming from. It could be from equity in your current home, savings or gift money. If you are looking at purchasing a home that has a rental suite income this can impact your mortgage qualifications so make sure this information is shared with your mortgage broker.
Knowing this information will also help you understand if you are comfortable with the payments and your mortgage conditions and commitment.
The last important item to consider is if you are taking on more financial commitments and payments, how will this affect your lifestyle? Is moving to a bigger home more important than eating out regularly, travelling or other lifestyle you have become accustomed to?
2. Know your responsibilities as a homeowner
Knowing the big picture of responsibilities is important to know before deciding to make the purchase. As a homeowner there are many costs outside of mortgage payment. If you are moving from a condo to a single family dwelling there are many other considerations. The one positive is you will not longer have to pay monthly strata fees, but that may need to be reallocated to monthly mortgage payments for a home maintenance fund. You are responsible for the maintenance and upkeep of your home, home insurance, property taxes, city utility bill. You also have neighbourly responsibilities to be mindful of such shovelling your sidewalk when it snows. Make sure you factor in all of these costs when looking at affordability and overall cost of owning a house. Make a list of the extra costs and the additional equipment, tools or landscaping requirements you need to budget for.
3. Know your closing and moving costs
There are fees associated with purchasing property including:
- Property purchase transfer tax
- The GST rate in 2021 in B.C., is 5% of the properties fair and assessable value
- Property taxes
- Utility bill hookups
- Increase in home insurance coverage and costs
- Moving or adding internet connections
- Lawyer fees for title searches, document retrieval and contract writing
- Sellers usually incur the full cost of the realtor fees on boths sides of the deal
- And last but not least, the cost to physically move your contents
4. Decide your timeline, location and type of home
To help determine this, there are key questions you can go over to help narrow down your ideal location, must haves in the type of home and property, neighborhood and figure out your timeline.
Make a list of your must haves and what you’re not willing to compromise on. For example the number of bedrooms and bathrooms, a south facing yard, a home with a suite or suite potential. Are you ok with doing renovations and updates or do you prefer a home that’s move in ready.
Other considerations are how does the move affect your family, lifestyle and schedule:
- Do you need to lineup your move in date for the start of school? Will your children need to change schools or how they get to and from school?
- Is walking distance to transit important?
- Is travel time to your job going to change?
Knowing what key lifestyle are important when looking for a home will help narrow down your search criteria and streamline the property search process.
5. Find a Realtor that works for you
Buying your next home and upsizing will be one of the the biggest transactions you will ever make in your life, so partnering yourself with the very best person to assist you is one of the most important tips to upsizing the right way.
You are making a significant purchase and you will want to have a Realtor working for you to take care of your best interests and help you navigate the process of purchasing a home.
When choosing a Realtor to work with, look for a local expert, one that is extremely active in the marketplace you are looking to buy in, knows the buying process well, stays informed of market trends, is effective at communicating and really understands your situation and how they can best help you.
Other key things to consider when buying your next home:
- What are their negotiating experience?
- Make sure your real estate agent can work around your schedule.
- Ensure they are willing to pick up the phone, timeliness is important – will they be available to you?
- Choose a realtor that is tech savvy and has some expertise in on-line marketing.
- Make sure the relationship ‘feels’ right. It is imperative the agent understand what’s important to you, your budget parameters and your expectations of the process.
6. Come up with a game plan
Most realtors will recommend you sell first, unless you have the means to carry both mortgages in the event you buy and then have a delay in selling your current home. If you live in a “hot” market or neighbourhood the time to list to selling may be short and will not be a big factor in your decision making.
One you have decided on a Realtor to work with you come up with a game plan for your next steps. Discuss different options in terms of should you sell first, buy first or vice versa. Understand what the pros and cons are for each scenario. Discuss the market conditions and what impact this will have on your decision. Your game plan will determine your next steps and if you are going to sell first or buy first.
7. Home inspection
Once you have found your home, you’ll have an opportunity to have an inspection completed
Hire a reputable home inspector to conduct a home inspection. Even if the home is new construction a property inspection is always advisable. A home inspector will be able to provide an assessment of the property to help you understand the current condition, immediate or future maintenance and repairs that are required. They will also give you tips on how to maintain your home.
You will know the condition of the big components of the home including:
- The condition of the roof and estimated replacement time frame.
- The condition and age of the furnace, hot water tank, electrical system and plumbing.
Ask the inspector to go over the report for you so you can ask more questions and get a clear indication of future maintenance and repairs. Ask for any red flags. For example many homes have Poly-b plumbing fixtures but they are known to fail. This could be a problem for future insurance purchases. For example asphalt shingles have a life-span of about 20 years. If the roof is nearing its life cycle and do you have money in the next few years to do a roof replacement?
8. Finalize documents and plan your move
Set up property insurance, finalize signing paperwork with your mortgage broker as well as book an appointment with a lawyer to take care of moving the title from the Sellers to you.
Once you have a possession date make sure to activate:
- Canada Post address change
- Update delivery service address
- Set up Fortis and Hydro accounts
- Set up new internet services
- Pack and move
- Buying your next home: 8 tips to upsize the right way
Wanting to size up usually always comes with a good reason. Take stock of where you are in your life transition:
- Do you plan on being in your new home 3, 5, 10 or 20 years?
- Are you starting a family, or will you be empty nesters soon?
- Do you want to have a rental income suite? Or need a mother-in-law suite?
- Do you want to start working from home?
Depending on your age and family situation, you’ll likely need to think about things you didn’t have to consider the last time you bought a home. Deciding to upsize is an exciting time in your life. Buying your next home: 8 tips to upsize the right way so you have every aspect covered and can start the search for your next dream home.
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