Best way to move up in home?

[skives]

So to start off this is totally for information purposes only. We currently own our home out right. We paid $152,900 and paid it off in 6 years 10 months. If we wanted to move to a better home what would be the best way to do that if we currently don't have ours listed for sale and we were to find one we like for sale? I believe our house could sell between $225-$250 maybe higher but I wouldn't pay it (but I don't decide the market). I did see a house listed that I lied for $289,900 so it's not hundreds of thousands of dollars more than our house it worth. My two thoughts of what could be done would be to either list our house and buy the new home with the hope ours sells then put the proceeds on the new mortgage or rent our current house out with a property manager.

Our current income is $85k-$95k a year split basically between the two of us (40m, 35f no kids)
$420k in retirement combined
no debt
$15k in EF
$8k in sinking funds (new vehicle, home repairs, christmas gifts, vacations)

Tell me what your thoughts are? Yes I like the house I saw online but my mentality is to be a saver and stick where I am because I am risk adverse at least when it comes to this except I like to dream about what could be.

Thanks for the info.

[bjl584]

You could do a contingency offer. Basically, you agree to buy a home contingent upon that your current home sells within X number of days.
But, you are debt free, so you could easily take on another mortgage while you sit on your current home until it sells.

[kork13]

First, plan for the worst case scenario & be happily surprised when things work out for the better.

Second, simplicity wins the day. A contingency offer is totally valid, but passes some of your risk off onto the seller. Some sellers wouldn't want to deal with the contingency, especially if they've got multiple offers.

In your case, I'd save up the difference between your sale price (reduced by 5-10% accounting for transaction costs) & the potential purchase price. Thinking worst case, call it a nice even $100k. Then buy the new house with a normal mortgage (the saved up cash makes for your DP), and separately list your current house. That gets you into the new house without the strings of your previous house. Once your old house sells, you can use the proceeds to pay off the mortgage & voila, back to a debt free home!

Last thought ... Renting the old house is a viable option, and one that I've done myself. But in general terms, I'd tell people not to become accidental landlords. If owning rental real estate is/has been The Plan ... great, do it. But don't fall into it out of fear or convenience or indecision. When those are the circumstances, it tends to become nothing but a headache for you, and quickly becomes regretted.

[Fishindude77]

Yes I like the house I saw online but my mentality is to be a saver and stick where I am because I am risk adverse at least when it comes to this except I like to dream about what could be.

Thanks for the info.

Why not just enjoy your life with no house payments and have fun?
Do some cash improvements to your existing home to make things more to your liking.

[skives]

Why not just enjoy your life with no house payments and have fun?
Do some cash improvements to your existing home to make things more to your liking.

That is most likely the plan (99.9999999%). The only thing I don't like about where we live now is the private road is dirt.

[ua_guy]

We're kind of in the same spot, but just looking to move. Not looking to trade for bigger/better. We haven't found the home of our dreams* yet, but we did do all the work of getting the house ready to list. It's actually a really good exercise to do anyway because it means knocking out all your deferred maintenance on the house, getting rid of clutter, identifying any potential issues the buyer could find, etc. If we decide it's time, or if a great place comes along, we're one click away from listing, and that makes for a much stronger contingent offer. The market where we intend to buy is accepting contingent offers, too. That's important. A hot market? Contingents often won't fly when houses are moving in mere days.

I see you posted since I've been writing this... Dirt roads! Been there, still there, am doing that. Where we lived previously, the community got a bid to have the road paved with RAP (recycled asphalt product) as a cheaper and more eco-friendly alternative to asphalt. For approximately one mile of 8'-wide road between the two forks of our neighborhood it was going to be something like $250k, or about $25k per household. Nobody had an appetite for that, so the idea died. I was fine with the road as it was, however, the drama and infighting it caused in the community, especially over maintenance, wasn't worth it. I'm very glad we moved on from there, we'll never do a community of small homes on shared services (dirt road, well, gate, etc) ever again. Now we have a long gravel driveway of our own, and I still hate maintaining it!

**regarding the home of your dreams, we learned after our first house that you can't fall in love with a house until the day after you close on it. If you get emotionally wrapped up in it during the search and purchase, you'll put yourself at risk of spending too much or doing brash things in a real estate transaction. You want those kinds of buyers though - they're great!

[skives]

We're kind of in the same spot, but just looking to move. Not looking to trade for bigger/better. We haven't found the home of our dreams* yet, but we did do all the work of getting the house ready to list. It's actually a really good exercise to do anyway because it means knocking out all your deferred maintenance on the house, getting rid of clutter, identifying any potential issues the buyer could find, etc. If we decide it's time, or if a great place comes along, we're one click away from listing, and that makes for a much stronger contingent offer. The market where we intend to buy is accepting contingent offers, too. That's important. A hot market? Contingents often won't fly when houses are moving in mere days.

I see you posted since I've been writing this... Dirt roads! Been there, still there, am doing that. Where we lived previously, the community got a bid to have the road paved with RAP (recycled asphalt product) as a cheaper and more eco-friendly alternative to asphalt. For approximately one mile of 8'-wide road between the two forks of our neighborhood it was going to be something like $250k, or about $25k per household. Nobody had an appetite for that, so the idea died. I was fine with the road as it was, however, the drama and infighting it caused in the community, especially over maintenance, wasn't worth it. I'm very glad we moved on from there, we'll never do a community of small homes on shared services (dirt road, well, gate, etc) ever again. Now we have a long gravel driveway of our own, and I still hate maintaining it!

**regarding the home of your dreams, we learned after our first house that you can't fall in love with a house until the day after you close on it. If you get emotionally wrapped up in it during the search and purchase, you'll put yourself at risk of spending too much or doing brash things in a real estate transaction. You want those kinds of buyers though - they're great!

Yeah this is our first house and when we were looking I was always saying I want to find what I want not a starter home because I don't want to move every 10-15 years upgrading house. To me a home is just a roof over my head that appreciates in value (hopefully). I want it to be nice and do the repairs/improvements over time but I only need what I need.

[Fishindude77]

That is most likely the plan (99.9999999%). The only thing I don't like about where we live now is the private road is dirt.

Between myself and a few neighbors routinely nagging our county road commission, we eventually got our road nicely paved a couple years ago.
The squeaky wheel gets the grease.