Moving On Up: The How-To Guide for Trading Up,
24th October 2017
Your starter two-bedroom apartment provided the perfect late-night crash pad a few years ago but as your lifestyle changes, so will your requirements for a comfortable home.
Whether it’s your family or your paycheque that’s expanding, if you’re looking to boost your square meterage our helpful guide will help you make the transition from starter space to home sweet home a seamless one.
‘People would tend to buy a one or two-bed apartment and spend somewhere between €250,000 and €400,000,’ Lisney Residential Divisional Director Robert Lawson says of the typical Dublin starter property. ‘Then they get married, baby number one comes along, and suddenly what they want is a house with a little bit of a garden, so they go for a little townhouse maybe or a three bed semi-detached.’
If you need more space, Robert suggests that the first thing to do is get a handle on your own finances. ‘Firstly you should start off by talking to an estate agent to get an understanding of what the value of your own house is,’ he says.
Do some market research to get an idea of what prices are being quoted on properties you’re interested in. Consider that you may have to pay a premium for ample off-street car parking or proximity to local schools. You’ll have a clearer idea of the entire financial picture: what kind of loan you’ll need, how much your property will want to sell for and finally, the amount you’ll need to bid when the time comes.
Once you have a sense of the numbers, you can head to your bank and discuss loan options with a bank manager. Having a good grip on your financial situation will make every step of the trading-up process easier.
Above all, Robert recommends considering your loan situation. ‘Selling your property is one thing, but there’s little point in selling it if you don’t then have the financial wherewithal to make the move you want to make,’ he says. ‘It’s good to avail of a mortgage broker as well,’ Robert recommends. ‘A broker may have an overview of the market and can advise if there is a better loan out there for you.’
In addition to considering what sort of equity you’ve acquired, it would be helpful to ask yourself a few questions. What kind of loan do you have? If you have a favourable loan, will those terms transfer onto the new loan? Are you giving up a good loan in order to purchase your next home? ‘There’s a trade-off there, space versus ending up with an inferior loan from a buyers’ point of view,’ Robert says.
When you’re certain you can make the move financially, it’s time to start the process of selling your starter.
An initial meeting with an estate agent will give you some insight into the value of your home and once you’re ready to put your property on the market, an estate agent can make sure the mechanics of moving run smoothly.
In the case of trading up, when you are both buying and selling, an estate agent will have valuable insight into both sides of the process. ‘We know what’s coming on the market, what’s available on the market, what can be bought privately and off market. We can assist on both sides of the transaction,’ Robert explains.
Selling Your Starter Home
Securing the highest bid possible is always the goal when selling a property. If you’re trading up, it’s all the more important to make the most you can from your starter home so you’ll be able to purchase a bigger, more comfortable space.
A house that is well-presented will gather more interest and higher bids. ‘If your property has a slightly dated kitchen or bathroom, it would be worth an investment,’ Robert recommends. The better improved the appearance of your property, the more bidders it will attract, ‘no two ways about it.’ Tidying up the garden or giving the bathroom a fresh coat of paint will boost your property’s appeal.
At the same time, be mindful with what is spent on modernizations. ‘You do want to be careful that you don’t start spending money you won’t make back.’ Robert warns.
A simple, cost-effective trick to prepare for both sale and purchase is to declutter. Go through your home and box up any belongings you don’t immediately need, such as family photographs, knick-knacks and souvenirs or unused furniture. When prospective buyers tour your home, the blank canvas will allow them to better picture themselves creating a life in the space, which will encourage bidding. Meanwhile, you’ll be prepped and packed for the move ahead!
After the paint is dried and contracts are signed, you’ll be looking forward to moving into your new nest. However, there is a bit of a waiting period before you can unpack your boxes.
Before 2006, the standard timeline for trading-up was to buy then sell. Now, Irish homeowners sell first, but also need to factor in some gap time before buying.
‘With the timing being what it is, you may have to rent in between as there may be a time difference between when you move out of your own property and move into the new property. So you’ll find people will either move back in with parents or sign a lease,’ Robert says.
Robert says ‘ It’s important to factor in potentially having to rent or stay with family for up to 12 months. You will need to analyse what this may add to your budget. Also you need to be mindful of other logistics such as storing furniture during this time and the costs associated with that.’
In order to get a head start on the buying process, Robert recommends making lists of non-negotiables and features you’d like to have. ‘There’s got to be a bit of compromise,’ he says.
Are you looking to ensure you’re in the catchment area for a certain school? As you spend more time working in your vegetable garden , is it imperative to have a south-facing rear garden? Consider what’s really important to you in this next stage of home ownership.
As with any property purchase, Robert says learning how to bid is a crucial part of the process. ‘The fact of the matter is, in Dublin, there are more buyers than there are sellers. When you try and buy a house, you’re going to get into a competitive bidding situation. You’ve got to go through a couple of those situations before you actually know how to negotiate your way around.’
Moving house can be intimidating even in the easiest of circumstances. With the ups and downs of moving from starter to rental coupled with the buying process, trading-up (while often necessary for a new lifestyle), can feel burdensome. With a little financial planning and a helpful estate agent, however, it is possible to go big and go home.
Thinking Of Moving Up?
If you are considerign making a move, why not get in touch with our experts who can offer you the best advice on property in Ireland. And remember to follow us on Facebook, Twitter or LinkedIn for all the latest news.