This is the second in a series of posts about how to sell your home. This installment is about preparing your finances for selling and moving on from there.
When you sell your home, you’ll probably need to move into a new home, whether you’re upsizing, downsizing, or moving across the country. Having your finances in order before you list is an important first step in preparing for the big change. These are a few steps you can take to ensure that your financial ducks are in a row before you list:
- Save, Save, Save: When you move, you will need to make a 20% down payment on your next home, plus pay for expenses like inspections, closing costs, moving, and repairs and updates to the new property. If you have a nest-egg to cover these costs, the whole process will go more smoothly. Depending on the condition of your home, the status of your existing mortgage, and the housing market, you may end up with a profit on the sale of your current property, but having some latitude before it sells works in your favor.
- Be careful with your credit! Your credit score will have a big impact on what kind of financing you can get, so if you will need a loan for a new home to live in when yours sells, do what you can to increase that score! Some steps to make your score the best it can be:
- Avoid applying for new credit until you have closed on a new home
- Don’t make large purchases
- Pay all your bills on time
- Work with your banker to prepare for the next step: Talk with your banker to find out how much you owe on your current home, whether you will need to sell it before you buy a new place, and how much financing you will be able to qualify for as you search for your next home.
- Find a Great Realtor: Not only will you need a great Realtor to sell your home, you’ll need their expertise to prepare before you even get to listing. Your Realtor will need to be part of the early conversation because they can do the research to help you figure out what price you can expect your existing home to sell for.
Having your finances in order, and being an informed consumer will make you a better decision maker when you get into the housing market.
Here are a couple of great articles with more information on getting your financial ducks in a row: