Tamara Bodrick: Hi! I am Tamara with Wells Fargo & Company. Today we're discussing how to decide if you can afford a larger or more luxurious home. Without a doubt a home is the largest purchase many people make. Like any major decision, home ownership requires careful consideration, especially if you're planning to buy a much more expensive home.
You should be very clear about your purchasing reasons. Have your family's needs changed enough to require a larger and more expensive home, do you need or just want certain amenities and features in a different home and can you afford them?
Before making an offer on a new home, you'll need to estimate the cost of selling your current home and how much you can realistically expect to get from your home.
Price your home, calculate sales cost, including the cost of repairs needed to maintain your homes' value, these are valuable steps. If you have a leaky roof or need electrical or plumbing work, your sales price is likely to be lower to cover those costs. Consider hiring a home inspector to uncover any hidden problems. If your home is priced realistically, you may be able to sell it faster.
Property appraisers set a price by comparing a home to recently sold nearby properties similar in square footage, room number, age and features. Your real estate agent will help you decide on a listing price by getting a list of comparable properties. You may also want to consider buying a home that needs a little fixing up.
Homes needing renovation maybe available below market value, there are purchase and renovating loans available, they may enable you to buy and repair with one loan. Consider that remodeling and repairs may require hiring a contractor depending on the loan you chose, but the time and cost of renovating could help you avoid the dream home you really want.