How to Move Up to Your Next Home with Ease — Week 3

My 5-part series is a “how-to” guide for moving up to your next home with as little stress as possible. Whether it’s your first time moving up or you’ve done it before, this series is a great resource. This time around, you’ve got more to think about, plan, and “get right” than when you bought your first home.

It’s never simple when you’re ready to move on to a new home and you already own one to sell—or perhaps rent out. If you’re in San Pedro, Long Beach, or anywhere in LA, timing the sale and purchase of a home in such a competitive market can feel overwhelming.

It’s a logistical and financial dilemma:

• How do you keep your current home clean for buyers while searching for your next home?
• How do you finance your next home while still owning your current one?
• How do you time it all so you don’t end up with two homes—or no home?

That’s why I’m breaking it all down step by step, so you can move up to your next home without unnecessary stress.

Buy First or Sell First? The LA Real Estate Catch-22

Your decision on whether to buy first or sell first (or even rent out your home) depends on your unique situation. But you’ll need expert guidance to make the right call.

Every move-up buyer in LA has different finances, family needs, and home values. In San Pedro and Long Beach, some homes sell fast, while others take time—so strategy matters!

Today, we’re focusing on the financial aspect of making the buy-first-or-sell-first decision. Talking to a lender is a critical first step to understanding your financial options.

Before you talk to a lender, do some quick math:

1. What’s your ideal monthly mortgage payment for your next home?
   LA home prices vary widely, and it’s easy to get pre-approved for more than you want to spend. Start with what you’re comfortable paying per month and work backward.
2. How much cash do you want to put toward your new home?
   Maybe you’re using savings, or maybe all your funds are tied up in your current home’s equity. Either way, knowing your available cash upfront is crucial.

If all your funds are in your current home, don’t worry—there are ways to unlock that equity before you sell. I help clients do this all the time. Contact me, and I’ll walk you through your options.

Next Step: Working with Your Lender

Once you have these numbers, it’s time to talk to a lender. Here’s what you need to ask:

1. How much can I be approved for if I keep my current home?
   (In case you want to buy first or keep it as a rental!)
2. How much can I be approved for if I sell my home first?

Your lender will factor in your debt-to-income ratio and let you know if buying first is possible—or if you need to sell first.

If You Need to Sell First

If your lender says you need to sell first, don’t stress—many buyers do this successfully. Here’s what you should keep in mind:

• Plan for a temporary living situation. If you don’t find a new home right away, you may need to rent back your old home or find short-term housing.
• You may feel pressure to buy quickly. Avoid making a rushed decision!
• Consider a sale-of-home contingency. Some sellers won’t accept this, but in the right situation, it can help you secure your next home before closing on your current one.

If You Can Buy First

If your lender gives you the green light to buy before selling, that’s usually the easier route. Here’s why:

• You can take your time finding the right home. No pressure to rush into a decision.
• You can move at your own pace. Renovate or settle in before moving.
• You might have a period of double mortgage payments. Be prepared for this financial reality.
• You won’t know exactly how much your current home will sell for. This could impact your financing.

There are creative financing solutions to help if you need cash for a down payment before selling. I can walk you through those options!

Moving Forward

Your lender and I (your local real estate expert!) will work together to determine whether buying first, selling first, or renting out your current home is the best strategy.

The market and time of year matter too! Selling in the winter holiday season in LA is different from selling in the spring or summer. We’ll factor that into your game plan.

I know this can feel overwhelming. But with my experience guiding move-up buyers in San Pedro, Long Beach, and Greater LA, I can help you create a plan that works for your situation.

Let’s chat! Contact me James.Daniel@kw.com and we’ll go over all your options together. I’ll share real-life examples of how my clients have made their moves successfully.

Stay tuned for Week 4 and Week 5 of the “How to Move Up to Your Next Home with Ease” series, where we’ll break down the next steps even further!