If you just sold your house and received an offer substantially over list, then your next step is not to blow the windfall you just received.
To put it plainly you must be willing to walk away from any home that doesn’t fit within your planned budget. With that said, you need a clear plan in place before you look for your next home.
If you don’t approach your next home with a clear budget in terms of what is comfortable to spend, there is a good chance of blowing your windfall.
Competition in real estate is tough due to low inventory in the market. So just like the creative and competitive offers you received when you were selling your home, now you will need to be equally as competitive without breaking your bank. This is where you work with your realtor to create creative offers that have a high chance of securing your next home.
During the pandemic, many buyers responded by ditching their plans and going over their original budget for their new home.
Remember your budget is not your mortgage pre-approval. Instead, your budget is the number you come up with after carefully reviewing your finances.
My advice is to look for homes that are under your pre-approval amount. This will give you the flexibility as a buyer to bid over list if needed to secure a home. By looking for homes under your budget you are able to use part of the windfall you received to sweeten your offer, without losing all that additional bounty simple to get into the home.
Be open to creative offers, discuss early with your realtor what type of offers are needed to secure homes in this hot market, and set your limit so you can enjoy a little slice of that windfall while slipping drinks on the beach.
By R. Jones
