The Financial Fairy Tales Blog

Moving home is a tough and complicated process – so when the time comes to move home, and your kids are demanding answers, it can be fairly easy to dumb down the process to buying and selling. We have this much money and bought this house is what you might say, and while it is true, it’s an extremely diluted process. While that knowledge is invaluable, any extra information that you can impart on your children will help them down the line – when the time comes for them to move home!

(source)

The first thing to do when moving home is to complete the purchase of a new home. This is usually done through a mortgage – money borrowed from the bank to be paid back over the course of time specifically with the home in mind. In some cases, properties are bought outright, but a mortgage is most common. You need to work out what you can afford and a good way of estimating is basing money off of the mortgage deposit. Ten percent is the usual borrowing limit so $10,000 dollars will likely give you the ability to borrow up to $90,000. This means that $100,000 is your range for buying. This will differ from lender to lender. Once you know how much you can spend, you’ll need to locate the perfect property. This is easily done thanks to estate agents and real estate websites which afford the buyer an in-depth look at their new home. You can get a better look at a home by arranging a visit, or viewing. After one, or multiple viewing of various properties, you might have identified the perfect property. This is a stage where you can feel free to negotiate a price. You could possibly get the seller to drop their asking price slightly to either bring the property into your price range – or you could simply do this to save cash and increase the power of your deposit/down payment to reduce your monthly mortgage repayments.  There are a number of things you need to think about when negotiating a price on the home. If you low-ball the buyer, you might insult the seller and miss out on a good home that you’ve taken the time out to identify. Of course, you also don’t want to pay more than you need to. Thankfully, there is plenty of data on hand… Look at sales in the same area as the potential new home. Is your offer in line with these sales? Did these sales go for an amount lower than the actual asking price? If the mean price of homes in the area matches the asking price, you don’t want to dip down on the offer much at all. It also depends on the market; some areas get snapped up quick, others don’t. If you’re on a high-interest market, a strong offer is going to be needed if you don’t want to lose out, but you’ll have a lot more leeway in other markets. Finally, consider how long the home has been on the market. If it has been up for a while, you’ll have a better chance of a lower offer being accepted.

Once your offer has been accepted, this is where things get a little bit tricky. Contracts need to be signed, and you can be caught out here by the seller or their legal team. Contracts need to have clauses inserted which mean that you can back out of the sale if there are issues with the home. These issues can also be used to leverage a price reduction on the home. This is the time for you to pay for a professional home inspection which can bring defects in the home to light. A price reduction can be asked for upon discovery of issues, while major problems can be a total dealbreaker. Now is the time to find out. Once this stage is over, you can submit your final mortgage application, go over the costs of closing and then sign the contract. It goes without saying that this part of buying a home is full of legal lingo – and if you don’t understand anything you need to find a conveyancing solicitor who can help. This is worth doing anyway as these professionals can sort out a lot of issues to save you the stress of doing so.

The closing stage of purchasing a home isn’t just about signing on the dotted line though. Firstly, you need to make sure nothing has changed within the property since your inspection. Then, all the money needed for the purchase needs to be paid into the seller’s account. This is now a good time to review the paperwork that needs to be signed so that you can triple check every clause in the contracts. You need to work out how much you’ll be paying each money and agree on your final mortgage deal. At this point, you’ll know exactly what is expected of you by your lender and you can now sign on the dotted line. A move in date will be discussed and that’s it, you’re a home owner!

Moving in is a big deal, so get everything boxed up well in advance. It’ll be worth your time to organize a professional cleaning of your new home so it is perfect upon your arrival. You might have already organized some contracted renovation, so this might delay your true moving in date. In any case, get all your stuff packed up and ready to be moved into the home. Book a removal company well in advance of the moving date and pack up. If you’re selling your current home, do a top to bottom sweep and rid yourself of everything you don’t need while leaving a clean house behind you.

(source)

That’s just about everything you need to know when moving home, it’s a complicated process and the more knowledgeable you are at the start, the better you’ll handle the inevitable curveballs that will come your way during the buying process.