Trading up takes planning
I am on record here at Boston.com Real Estate Now that I don’t like starter homes. One of the young families that I mentioned yesterday owns a starter home. The down market is likely to be in their favor for their trade-up. But, they still have a lot on their plate as they want to trade up in the current market.
If they can carry two mortgages at the same time, then they are able to own both houses for some period of time. This allows time to move, time to renovate the next place, and reduces wear-and-tear on their nerves. The down side is that it is a drain on their financial resources until the first house is sold. This is, by far, the better situation. Once they get the first property sold, the family is mortgaged at a level well below the mortgage limit of their single income.
If they have to sell their first house in order to finance their second, the picture gets much more complicated. Common scenarios:
1. Line up the next house and double-close:
This takes luck in getting the first house under agreement at a time when the second house is for sale. At the very least, it makes for a very tough few days, twice. Once when they are bidding on and inspecting the second house. Second when they empty their first house before closing and their second one is closed before their moving truck arrives there. Timing is everything; when I have clients who try this, most do not get a good-enough second house option and choose to rent for a short period.
2. Using interim storage for things and people:
The stuff can go into storage. That’s the least of it. The bigger problem is finding a rental. They’re at the mercy of rental market hostility against young families, again. They could find a not-so-great place for a short time or find a better place and stay put a while. There will be moving stress, twice, if they trade up later. Some people move in with extended family; that’s moving stress and probably some family stress. Remember, they are doing all this with young children in tow. This is a hard thing to do.
Have you done this? Did your family survive intact? Are you happy now that it’s over?
