Tired of having your already cramped bedroom do double duty as a home office and at-home gym? It might be time to upsize. But while getting more space may seem enticing, upsizing can hold pitfalls for unwary home buyers.
“It is important to be aware of these mistakes because upsizing can be expensive, but if you plan it well, do your research, and shop around, it doesn’t have to be," says Lior Rachmany, founder and CEO of Dumbo Moving and Storage in New York.
Before taking the plunge, here are some mistakes to avoid when upsizing to a larger home:
You can't stop fantasizing about bigger spaces, but take a break for a reality check. You don't want to ditch your current dwelling without understanding the market and thinking things through.
“Although the frenzy of the current real estate market creates motivation to move as quickly as possible, it is important to be diligent and thoughtful in your decision process,” says John Hollyer, senior portfolio manager at Bespoke Real Estate in New York. “Make sure you understand the market, comparable sales, and value of the house you may bid on. Your broker can assist with an analysis of sold properties and competing inventory.”
And in the rush, don't get suckered into paying for any conveniences you don't need, such as expediting certain services.
“A lot of times, when you want service to your old home or upsized home, you are paying more for speed,” says Rachmany.
Instead, allow yourself time to get those things done.
It’s important to be realistic about how much space you actually need.
“Assess your space in your current home, and what’s missing or necessary to improve upon it,” says Hollyer. It may turn out that the floor plan or your furniture layout is the problem, and not a lack of space. By the same token, make sure that space in a new home is laid out for maximum usability.
And once you move into that bigger space, live in it for a while, without buying extra furniture, to assess what pieces you really need, says Rachmany. He says furniture needs space to be used effectively, so you can move between pieces without squeezing through.
“Also, plan your home for everyday use, not for special occasions. People have a habit of buying too much chairs and larger-than-needed sofas for company. But you can always use foldable chairs for that,” says Rachmany.
When making any major purchase, try to picture how your life might change in coming years.
“Buying a new home that won’t potentially fit your needs in the future will only lead to another purchase and move that could be avoided with proper forward thinking,” says Hollyer.
He says to make sure to have a realistic projection of how long you plan to stay in the new home, how your family’s needs might change in that time, and whether the home would continue to meet your requirements.
Another thing homeowners often forget is that upsizing brings extra costs that can snowball over time—bigger homes cost more to maintain.
“Factor in for larger utility bills, and have [more] money set aside to do repairs when budgeting for your new home,” says Rachmany.
Make sure to do your homework on financing, and don't go in blind when trying to buy a bigger (read: more expensive) home.
“Without accurate information regarding what you are qualified for, you’ll be wasting time,” says Hollyer.
Rachmany suggests leaving it to the experts if you aren't well-versed in applying for loans or mortgages. Consider using a financial consultant and/or a mortgage broker—ask around for referrals.
“It is very easy to get screwed over by interest rates when applying for loans,” says Rachmany.
And while mortgage rates are at historic lows, experts say you should still compare financing options, which can vary considerably.
“Bigger homes mean larger property taxes, larger mortgage, and larger homeowner insurance," says Rachmany. "Only upsize your home if you have the budget, realistically, for it.”
Don't let maintenance of your current home fall by the wayside in your rush to upsize.
Rachmany suggests keeping up the maintenance of your home, and if something breaks, to fix it before you move out.
“In order to capture your current home’s peak value, you want to keep it in top condition,” says Hollyer. “Investing in routine and proactive maintenance of your current property is necessary to provide more value to you when it’s time to sell.”
Upsizing to a new home doesn’t give you carte blanche to go crazy and overspend.
“People have an initial 'hotel' experience with their new home, where they leave all their lights on, and just really change their living at home habits and become more wasteful,” says Rachmany.
He suggests holding off on buying all new stuff. Instead, replace items when they break or are no longer usable.
“Extra space doesn't always need extra items. You don't have to fill up your kitchen counter with gadgets just because you have extra space,” says Rachmany. “See how much your living expenses change, then get extra items if needed.”