Anyone who has bought a new home knows it can be an exhilarating but nerve-wracking process — especially when it's a new construction home. The dream of making memories in a place perfectly suited to your family is exciting — but realistically, there are a lot of obstacles.
One of the biggest obstacles can be selling your existing home at the right time. Even when the market is great, there's no guarantee it will sell exactly when you need it to.
If you sell too early — before you can move into your brand-new home — you may have to find temporary housing (say “Hi” to your childhood bedroom). Or, perhaps even worse, if you don’t sell by the time you close on your new home, you will face some seriously tough choices: lowering the asking price, taking out another mortgage (assuming you can qualify), or canceling the purchase altogether while losing thousands of dollars in earnest money deposits and risking a lawsuit.
Suddenly, all of that exhilaration turns into a massive headache. But it doesn't have to be this way. You can take control of the process and eliminate the worry by making your buyer and seller one and the same.
Find a Builder With a Trade-In Program
When you work with a builder that will purchase your previous property, you completely avoid the risk of double moves, double mortgages, and lowered asking prices — and best of all, you gain the benefit of a smooth, predictable sales process.
Trade-in programs eliminate the need to find (and pay) a realtor because the builder will already have the lender, title company, and preferred broker lined up. Moreover, in all likelihood, you'll get a great sales price. If your builder doesn't offer a trade-in program directly, you may want to partner with a company like my trade-in company. If you build a new construction home, we will purchase your home for about what you would net with a traditional agent. In addition, if you sell for a higher price, we tear up our offer, so you can't lose. Same-day closings, no double moves, and less stress!
Some homebuilders even have partnerships in place that allow them to offer a leasing option, which would enable you to become an investor instead of a seller. Leasing can be a great way to earn rental income from your existing home and extra tax deductions. In fact, your existing home can help pay the mortgage on your new home.
As an investor, you will definitely get more bang for your buck over the long run. You could collect thousands of dollars in rent while the market appreciates and then sell the home in a few years for much more than it's worth today. The real estate market is bouncing back like crazy — your $200,000 house could be worth $250,000 to $300,000 just five years from now.
What Have You Got to Lose?
Even if you feel dead-set on hiring a realtor and taking the traditional route, I strongly urge you to consider all of your options before heading down that path.
If you’re in the market for a new construction home, seek out a homebuilder that offers a trade-in program. Talk to a sales rep to find out what the builder would pay for your existing home — just as you would any other potential buyer — and rest assured that you won't be obligated to accept the offer.
Not sure whether the offer will be too low? Why not find out? Many are surprised at how aggressive builders will be to buy your home considering you are buying a new one. How much is that convenience and peace of mind worth to you?
Building a new home is never a cakewalk, but it also doesn't have to be a nightmare. Understanding the options available to you will not only empower you during the process, but it may actually provide you with financial opportunities you never thought were possible.
So instead of beating up builders for a free fridge or an upgrade to nicer granite, why not beat them up by getting them to buy your home? It just makes sense.
