Are you considering upgrading or downsizing your Arvada, Colorado, home? You’re not alone! But how do you make a move when the real estate market is shifting?
It’s important to have a strategy informed by current market conditions when transitioning between homes, especially if having two mortgages could put a strain on your finances.
Why Timing Matters in the Current Market
Building Inventory
There are more homes for sale in the Denver metro area due to an increase in interest rates – there are less buyers available who can afford higher prices and higher rates so prices are softening. More inventory offers buyers more options, but it also means that sellers must set a fair price for their property. In a competitive market, you must price your home sensibly to ensure that it draws in buyers.
The Impact of Price Drops
A noticeable number of price reductions are beginning to occur across Denver. This pattern emphasizes how crucial it is to have a financial cushion when planning your next purchase. Should your house take longer to sell, you may have to reduce the asking price to draw in buyers. You can avoid future financial strain by understanding this is a possibility and by working with worst-case scenarios.
Five Strategies for Transitioning Between Homes
Transitioning between homes involves lots of moving pieces. Choosing the right strategy means understanding current market conditions as well as diving deep into your financial goals and risk tolerance. Here are five proven ways for you to make a move:
Home Sale Contingency
A home sale contingency is used when you want to make a bid on a new home that is contingent on the sale of your existing home. This approach saves you from holding two mortgages at once but can make your offer less desirable to sellers.
Double Move
This approach is based on selling your current home, after which you move to temporary housing as you seek your new home. Although it requires two moves, it eliminates the financial risk of holding two mortgages
Leaseback Agreement
You can ask your buyer for a leaseback agreement following the sale of your home. A leaseback enables you to live in your current home up to 60 days after it’s sold to the new buyer, allowing you to find, purchase and move into your new home without making a double move.
Bridge Loans
A bridge loan is a loan that allows you to tap into your current home equity to purchase your new home without a home sale contingency. It is very powerful but may also be risky, as it carries a higher interest rate and the possibility of carrying two loans at the same time if you are unable to sell your current home quickly.
Retain to Rent
If it makes financial sense, you can retain your first home and rent it out once you move into your new home. There can be tax advantages (contact your CPA for more info) when turning your primary home into a rental property, along with the long-term wealth generation opportunities.
Choosing the Right Strategy
Selecting the best strategy for your situation involves a financial deep dive with a strong lender and working with an agent who understands real-time market conditions. The real estate market in Denver and Arvada has become increasingly challenging, and navigating it successfully requires professional guidance.
The Dempsey Group Advantage
For years, Lauryn Dempsey has served as a seasoned Arvada and Denver, CO, real estate agent, bringing added experience to each client for a seamless transaction experience. From buying to selling, Dempsey Group gives unparalleled service that is supported by knowledge of market trends and data-driven strategies to ensure your real estate goals are met.
Looking to make a seamless upgrade or downsize to your home in the Denver Metro area is quite exciting if one has the right kind of approach. This approach includes being able to understand the market, planning an upgrade or downgrade financially, and working with the most competent professionals. Contact Dempsey Group today to explore options available that will create the confidence you need for your next move.
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