I watch a lot of HGTV’s “Love It or List It,” and I often lose my mind when families with five kids living in a crowded three-bedroom bungalow decide to “love it” even though Hilary Farr (the designer on the show) could not expand the home by any amount of square footage to add an additional bedroom. Meanwhile, David Visentin (the show’s realtor) has found them a home with five bedrooms and an extra bathroom in their neighborhood. Why?
Well, because moving is a daunting and costly thought. It’s a lot of work. And it can be scary. But most people buy what is termed a “starter home” with the intention that they will live in this home for a few years and then upgrade later to a home that fits their evolving needs.
If you are in this boat, I asked realtors Santiago Gomez, realtor and broker with Santiago Properties, and Walter Perschbacher, vice president at Greenridge Realty, to share their thoughts on when to consider upgrading to the next home.
“The important thing is to think about your wants and needs in the short term and long run, get that list together, have a vision in mind for yourself about where you want to be and what you want to do,” Perschbacher said. “Right now is as good of time as any to potentially make a move up.
“The reason is the market is still appreciating. If you own a larger asset, the appreciation appreciates on a higher value, so from a purely financial perspective, when you step up, your appreciation grows at a better rate. Additionally, because interest rates are at record lows, the interest you pay will cost you a lot less over time than if you waited until a point when the interest rates go up.”
If you are considering a move, Perschbacher said one of the first steps is to contact your realtor and ask for an evaluation on your house. “You’d be amazed at how much values have been moving. It gives you a better feeling for your equity position.”
Gomez said while home sellers currently have the opportunity to get top dollar for their home, they also will likely be paying top dollar for their next home. He said making sure to maximize your home’s selling price by investing in improvements is important.
“You won’t get top dollar just because you are in a certain neighborhood,” he said. “We encourage people to talk with us ahead of time so we can advise them. What things are going to increase the value the most and what isn’t necessary? I think one of the biggest mistakes home sellers make is not wanting to meet with a realtor until they think their home is completely ready to sell. Meanwhile, they may have spent money on something that isn’t helpful or doesn’t add value.”
He also said knowing your equity position is important in figuring out how you’re going to go about getting into your next home.