Thinking of Downsizing? Steer Clear of these Common Mistakes.

The bigger the house, the more work (and money) required for upkeep and regular maintenance. You might decide to downsize your home if you are retiring, looking to spend more time traveling, or simply want to decrease your overall living expenses. In order to reap the benefits of downsizing, you need to have a solid plan in place. If you want your move toward downsizing to be a success, here are some things you should figure out ahead of time.

1. Budget Your Move

Even when downsizing, moving can be expensive. Besides the closing costs and out of pocket fees associated with buying a home, you will likely need to pay for movers or a moving van to transport your belongings to your new home. Something that people don’t think about when downsizing is that many of their belongings simply won’t fit in a smaller home. This means you will need to pay to store anything worth keeping that’s just too big for your new place.

2. Set Clear Goals

Why are you downsizing? Moving from a bigger home to a smaller home will reduce your mortgage payment and give you more time and money to focus on other things. The money you get from selling your bigger home can pay off the mortgage for the new house or to put toward other outstanding debts. You could use the money to invest in your retirement fund. Finding a smaller home that requires less upkeep can be an asset as you get older. Figure out what specific aspects of downsizing appeal to you and make sure these goals are at the front of your mind as you look for a new home.

3. Don’t Pay for What You Don’t Need

The whole point of downsizing is to figure out precisely how much space you need to live comfortably. If you don’t use a dining room, don’t buy a home that has one. Extra bedrooms, bathrooms, a study, or a second story are all things you might decide you no longer need. Be specific about what you are looking for in a home. This way, you won’t find yourself paying for rooms you don’t actually need or use.

4. Organize

A disorganized move can be disastrous for anyone, but especially for those who are downsizing. Before you move, sort through all of your possessions to determine what will come with you to the new house, what needs to go to storage, and what can be thrown away or sold. You may be inclined to hold onto items that you do not actually need, but you should only bring what you use every day or on a very regular basis.

Are you ready to downsize? Veitengruber Law can connect you with a trusted New Jersey realtor in your town so that you can achieve all of your real estate goals.

Selling Your NJ Home When You’re Underwater on Your Mortgage

selling your NJ home

Do you owe more on your mortgage loan than what your home is actually worth? If you do, you’re not alone. This is called an “underwater” mortgage and it can be a huge obstacle to selling your home. Although the good news is the number of underwater mortgages has decreased significantly over the last five years, the challenge of selling your NJ home with an underwater mortgage hasn’t changed. Unfortunately, sometimes homeowners simply have no other option but to sell. If you find yourself facing this dilemma, chances are you will be writing a check to your lender after the close of sale. The good news is you can use these tips to reduce the amount you owe!

If you owe more on your home than it is worth, you could end up losing money in the selling process. If your home is worth $150,000 but you still owe $180,000 on your mortgage, you could end up making up the difference in payments to your lender after the sale closes. And that payment increases if you can’t manage to sell your house for the maximum price it is worth. Owing a lender after a sale is never a desirable outcome for a homeowner.

How can you limit the financial impact of selling your house with a mortgage that is underwater?

Ideally, you would wait to sell for as long as possible. Waiting to sell can help you in two ways. First, it could give you the time needed to allow your home to increase in value. The closer the estimated value of your home is to how much you owe on your mortgage, the less you will owe your lender after the sale. Second, waiting to sell gives you time to make enough monthly mortgage payments to decrease the amount you owe. Taking the time to make extra payments on the principal balance of the loan could help you increase equity.

Sometimes, however, it isn’t possible to wait to sell. A growing family or a change in employment can leave you needing to sell quickly. If you do need to sell now, do an honest assessment of your home. There are certain repairs you must make in order to sell your home. Listing your home while it is in disrepair will not lead to top dollar offers. Fix broken appliances, repair damaged floors and repaint dingy walls. Give your outside some attention as well. Keep your lawn tidy by pulling weeds and mowing regularly. Add some inexpensive plants to your front porch to create a more inviting façade for interested buyers.

While you do want to spend the least amount of money fixing up your home to sell, one expense that may be worth it is hiring a professional home stager. These experts know how to use the furniture and décor you already have to create an appealing display for potential home buyers. In shifting around your living spaces, they can make your home appear more spacious and charming. Your potential buyers need to be able to envision the full potential of your home—and a professional stager can help create a wonderful first impression.

Setting the right asking price for your property is important and nuanced. While it may seem like a good idea to ask for more than the property is worth in order to make up for the money you owe, that is not advisable. More often than not buyers are well aware of what a home is worth in the current market. Setting your asking price too high can have the effect of turning people away before they even see your home. At the same time, you do not want to undersell your home and spend more than you need paying the difference to your lender. Seeking the advice of a real estate agent familiar with your area is a great way to set a good asking price. Experienced real estate agents will know what price will attract the highest volume of interested buyers. The more buyers that are interested in your home, the more likely you are to sell for the full value of your property.

If you are trying to sell your home with an underwater mortgage, you don’t have to roll over and accept a huge financial loss. There are plenty of things you can do to increase the value of your home quickly in order to yield the highest offers from potential buyers. Interested in other options? Ask us if a short sale is right for you.