By Blue Rybo-LoPresti
You may be beginning to notice the signs that it’s time to upgrade your home to something better. You might even feel as if your current home is cramped or too small. Maybe your family is growing but your home just isn’t. If you have made some smart financial moves recently, you should be in a good position to upgrade to a new home in OKC.
For most people, selling a home and moving into another one can be a very stressful and overwhelming process. You definitely want to do it right, while making it as easy and smooth as possible. To help you out, here are some important steps to take and tips to keep in mind as you go through the process or selling your home and buying a new one.
Once you start getting serious about selling your house and begin searching for your dream home in Oklahoma City, it’s a good idea to set a budget and begin evaluating what is important to you and your family for your next home. The following tips are some important things to think about during the initial planning stage:
Get a rough idea of how much your current home will sell for. A top-performing real estate agent can provide a market analysis, giving you an estimate of what your house may sell for based on similar comparable sales close by. Alternatively, you can sell your home quickly to a home buying company such as FixedProperties. They provide a quick cash offer and will purchase your home as-is.
It is important to note that your listing or selling price isn’t the profit you’ll walk away with when the deal is done. There are a lot of costs associated with selling a home, with agent commissions, transfer taxes, closing costs, and the expense of preparing your home to be sale-ready.
All of these selling costs will eat directly into your profits, and unfortunately, they can really add up. In most cases, they can account for up to 10% of your home’s total sale price. This means if you sell your home the traditional way, you could end up paying around $25,000 in fees for a $250,000 home sale. In addition, you only make a profit on the equity you own in your home. So for example, if you owe half of your home’s value to the bank and are losing 10% in fees, you would probably walk away with a check of only $100,000.
The good news is that your new home will probably only require about 20-30% for a down payment. Therefore, with a down payment of $100,000, you could afford a home between $350,000 and $500,000. That would probably make a nice upgrade!
Additionally, property tax rates, home insurance, and possibly HOA dues will also be part of your monthly payments. Therefore, take those costs into account when determining the budget for your new home. HOA stands for homeowner association and the dues go towards maintaining the common areas. This means that neighborhoods with pools, community buildings, gated fences, or any other common service will tend to have higher fees.
Getting a preapproval from a bank is one of the first steps you should take before even looking for a new home. A preapproval letter is a document that states how much your lender is willing to loan you for a new home. This letter shows the seller and their agent that you are a serious buyer who can afford to purchase the property. In many cases, sellers will not take you seriously without a preapproval letter in hand.
The process of preapproval involves filling out an application that includes financial information about you including your income, any existing debt, and your credit scores. Therefore, one of the most important things to do when buying a home is to improve your credit score as much as possible.
This doesn’t mean that you need an absolutely perfect score to get a decent mortgage rate. If you’re looking to get a good mortgage rate, aiming for a credit score of 760 or higher will put you in a good position.
Furthermore, some of the free, third-party credit reporting agencies tend to inflate your scores, or they may not give a complete picture of your credit profile. The best way around this is to get your official credit score that includes reports from all three major bureaus (Equifax, Experian, and TransUnion). You can pull your scores for free once every year.
Getting or keeping your credit high is easier said than done, however, there are some tips to help boost your score.
Since credit is fickle, you will want to keep your score as stable as possible during the mortgage approval process. You don’t want a small decision or mistake to cause your credit score to drop.
For example, if you are planning on buying a new home in the next few months, it’s a good idea not to take out any new loans, like a credit card or auto loan. Taking on more debt can affect your debt-to-income ratio and might cause a dip in your credit score. This will not be helpful when applying for a mortgage.
Additionally, you will want to keep your credit card balances below 30%. So if your total lines of credit on your cards are $10,000, it’s a good idea to not have a balance of more than $3,000. If you go over that threshold, it can signal to the creditors that you are overextended financially. According to FICO, the standard scoring system for credit, utilization of credit makes up 30% of your overall score.
Other factors that impact credit score are your total length of credit history. Someone with 30 years of credit history probably has a higher score than someone who just opened their first credit card. The best advice is to start having a credit card early in life and build credit over time. Your payment history is also important. Late payments will significantly impact your overall score. Many credit card companies have auto-pay options that will help ensure that you never miss a payment.
A quick tip: Try checking with your credit card companies to find out what dates they report to the major credit bureaus. You may be surprised to learn it’s not necessarily the same day of the month that your payment is due. With this information in hand, you can have the advantage of knowing when your score may go up or down.
When you are selling your OKC home and upgrading to the next one, it is important to choose the right method to sell. There are two main options, selling the traditional way, or selling to a cash buyer.
If you choose to sell the traditional way, as most people do, this usually involves hiring a real estate agent. This route typically will give you the best selling price, but after all agent fees and closing costs, you end up walking away with less money. In addition, you will have the make all the necessary repairs to your home and stage it in order for it to be in tip-top condition. Furthermore, you will have showings and open houses where strangers will be disturbing you in your home as you are getting ready for your move.
If you are upgrading your OKC home and want to sell the old one fast, FixedProperties is the leading home buying company in the OKC area. No Hassles. No Commissions. We Pay All Closing Costs. We buy houses in any and all conditions, for any reason! Whether you are selling because you are upgrading, relocating, or going through a divorce, we will make you a quick cash offer where you can even choose your own closing date that works for you!
Once you tell us a bit about your property, we will begin researching the different ways to sell. We genuinely care about your individual situation and want to help you find the best solution for your needs. We are a local company here in OKC helping homeowners with any and all kinds of houses, by offering fair and straightforward solutions. You won’t have to wait on the banks, inspections, or some lengthy escrow process. We’re ready to buy right now! Give us a call today at (918) 215-2988 to learn more about how we can help you!