Ask Phyllis: a blog series of frequently asked real estate questions. Email us here
Can I Afford to Move?
I look forward to reading your real estate news because you discuss a lot of timely topics. If you have answered this before my apologies. We recently learned that I am pregnant with our third child. I can’t imagine another baby in our small three bedroom home. We didn’t buy our home that long ago. Can I afford to move to a larger home and move to another? Where/how do we start to explore our options?
Jennifer
Dear Jennifer,
Congratulations! This may sound like a complicated process, but it’s really very simple:
The best way to for you to learn the value of your home (what a buyer will pay) is to meet with a local Realtor. I often meet with homeowners such as yourself who are unsure if they can afford to move to a more expensive home (move up). The first thing I or your real estate agent should do is view your home. Then review comparable listings and sales which are similar to yours (comparable location, condition, size, amenities and age). Once the value of your home has been determined, your real estate agent should provide you with an estimated Seller’s Net Sheet. This will outline the costs incurred in selling your home (escrow, title, brokerage, etc.).
Once we have determined your net from the potential sale of your home, it’s time to learn how much you will spend on another larger home. How? Look online. Go to open houses, or have your real estate agent show you homes.
Of course, there are other factors to consider: in addition to your increased mortgage payment, your property taxes and utilities will also increase. Once you believe you would be comfortable with your increased monthly expense, the final step (and not to be overlooked) is speaking with a lending professional to ensure you can qualify for the larger home.
