According to the 2005 National Association of Realtors' "Profile of Home Buyers and Sellers, about 60 percent of homebuyers also sold a home. That means that sellers are also buyers and buyers are also sellers needing to trade up, downsize or change lifestyles.
What sellers choose to do depends largely on where they are in their life cycle and if they anticipate needing more or less space. Among home sellers surveyed by NAR, half traded up to a larger home, twenty-five percent bought about the same size as the home they were selling and a little over twenty percent bought a smaller home.
Sellers younger than 54 tended to trade up while older sellers tended to trade down.
In an economic environment where interest rates are at a four-year high, inflation is rising, retirement benefits are lower, more and more homeowners are expecting their homes to provide retirement says the Center for Retirement Research at Boston College.
Trading up or down means that the consumer has to do the smart thing on two transactions -- selling one home and buying another. That can double the stress, suggests a new report by Realestate.com -- especially when the market turns from a seller's market to a buyer's market.
For one thing, sellers don't really know how quickly their home will sell, or if they will be able to follow through on their other plans -- getting out in time to purchase and move into another home. Any hitch in their plans could result in carrying double mortgages, temporary residency somewhere, or losing the deal and having to start over.
That's many bridges to cross, as the song goes.
Realestate.com calls the buyers and sellers who are crossing the bridge from one home to another "Bridgers." The site has looked into the emotional aspects of selling a home and buying another or buying a home while selling a previous home.
The findings are interesting.
Sixty-two percent of bridging homeowner respondents were successful dual-closers, meaning they were able to close on their existing home and move into their new home without a significant lapse in time. The remaining bridging homeowners were either homads -- those who sold their homes but had not yet closed on a new one -- or dual-owners, those who closed on a new home but had not yet sold their original home.
Explains RealEState.com's consumer experience expert Holly Slaughter, "About one-fifth of respondents ages 25 to 34 ran into issues when the buyer had a contingency clause on selling a previous home. First-time homesellers are probably selling to a first-time buyer. Experienced home sellers tend to have an easier time because they're better prepared with preinspections, hiring a Realtor, and preparing the home for sale, and they tend to be more savvy about the timeline. First-time sellers and buyers need a Realtor that can focus on first-timers needs."
On the other hand, older respondents were surprised at the number of problems home inspections brought to the surface. "They go years without renovations or maintenance and the buyer comes through and they have no idea what to expect," says Ms. Slaughter. "They are stunned there is so much wrong with the house. Now the pendulum has swung to the buyer in negotiations, where if the seller had done the preinspections, they would have had more flexibility in fixing those problems or disclosing them to the buyer."
Not surprisingly, most respondents felt it was easier to buy a home than to sell a home. With buying, they have the luxury of shopping for a home, while as sellers, they're dependent on getting the home ready for the right buyer which entails much more work. In fact, many sellers reported that the last thing they did on the way 'out the door' was clean or fix something.
There's an emotional high in being able to close the door on one home and open the door on another, says Ms. Slaughter. "For most bridging homeowners, success means moving seamlessly from one residence to another, since most of us don't want the hassle of living in temporary housing or the expense of paying two mortgages. It's notable that only about two-thirds of bridging homeowners can carry it off, and that's why setting expectations ahead of time is an important part of managing the stress."
That said, a majority -- 72 percent -- said that if they had it to do over, they'd sell and buy again.
