If you've lived in the same Lake Havasu home for a few years now, you might be ready for a change. And I admit, the Havasu real estate market has really heated up over the last few years. We're seeing more new construction going on. Many homeowners want to upgrade. If that's you, stop for a second. Take a breath before you jump headlong into another mortgage. You might want to sell your old home before you buy a new one.
Why You Should Sell Your Old Home Before Buying a New One
Two Homes Mean Two Mortgages
First of all, carrying two mortgages can be a serious burden on your budget. If you don't sell your old home before you buy a new one, you would be responsible for paying two separate mortgages each month. And that's only if you actually qualify for the additional mortgage. Remember, your debt-to-income ratio includes both payments. The second mortgage could push your ratio too high to qualify. If your savings account can handle both mortgages for a few months and you find a great deal on another Havasu home, then you might consider pouncing on the new property. Otherwise, focus on selling your old home first.
Lots of Competition in the Havasu Market
The Lake Havasu real estate market currently favors the seller. High buyer demand means you should be able to sell your home fairly quickly as long as you price it right and have a good real estate agent on your side. But that also means that you'll be thrown into competition with other buyers for a new property. When a seller has several offers to choose from, they might not want to wait for you to sell your current house. Even if another buyer offers a lower price than yours, the seller could decide to take their offer over yours simply because they want to make sure the deal gets done now. When you sell your old home before you put in an offer on another one, your offer looks much more favorable.
What if the Market Slows Down?
On the flip side, in a sluggish market, it might take a while to sell your current home. That could stick you with paying two mortgages until your current Havasu home sells, which might take a few months. Also, if you were planning on your current home selling for a specific price, you might be in the mindset of purchasing a much higher priced house than you originally thought. If it sells for less than that, where does that leave you?
Are You Ready to Buy a New Home?
Finally, are you really ready to buy a new house in Lake Havasu City? Some of today's renters are actually former homeowners looking to change neighborhoods. Renting a property in your desired area for six months to a year allows you to experience the lifestyle without committing to a long-term mortgage. This also gives you time to decide if that really is the area you want to live in for years to come. It's just another reason why you might want to sell your old home first.
These are the reasons you might want to consider selling your old home before buying a new one. However, sometimes, it's a good idea to buy a new one before you sell your current home. Talk to your Lake Havasu real estate agent to see which category you fall in. Then, listen to them when they advise you about staging and preparing your home to sell.