The complete guide to trading up your home - tips on bidding, structure evaluation and using mortgage brokers; includes information on using real estate brokers

Black Enterprise, July, 1994 by Shawn Kennedy

To make sure that their daughters were involved in the selection process--they did not make the trips to Louisville--the Cuyjets took video tapes of their top choices. The tapes helped them refresh their memories and, more important, gave their daughters a say in the decision. "Our daughters helped us choose the house, and they picked their bedrooms in the one we bought," explains Carol Cuyjet. "It made the relocation much easier for them."

For those who are buying and selling, it may be difficult to time your transactions so that you're not stuck with two homes. But with careful planning, it is not impossible.

When Julie and Anthony Tenette decided to sell their home last winter, with plans of trading up to a larger place, they found that the house they had bought six years earlier had not increased in value. An appraisal showed that their Riverside, Calif., home would probably bring only about $125,000--vs. $139,000 that they had originally paid.

"When we talked to a broker about putting it on the market, she said we needed to do things like repair the cracked asphalt in the driveway," recalls Julie Tenette, a 33-year-old travel associate. "If we had taken all of her suggestions, we would have spent a couple of thousand dollars just to get the house ready to sell."

Worse yet, there were other homes a lot like the Tenettes' that were on sale, including a house on the same block that was being sold through foreclosure. The couple--he's a 35-year-old pharmacy supervisor for Keiser--decided on a rather nontraditional option. For $5,000, they turned their home over to a professional investor who took over the burden of reselling the property at a market price.

This left the Tenettes free to take advantage of a fairly large price cut on a new home in a subdivision where the builder had only "a few homes left and wanted to close out the project," explains Julie Tenette. "If we had waited for our house to sell, I'm sure we would have lost out on the new house." This way, even though the Tenettes made no money on the sale of their former home, they were able to put "our equity into a much larger, and more valuable, home."

Clearly, after the go-go market of the past decade, the 1990s require a different sort of nerve. If you want a fast sale and can afford it, you can follow the Tenettes' example and look at the value of what you're getting, rather than the value of what you're selling. There's nothing wrong with trying to recover your investment or make a profit. But if the market has dropped since you bought, overpricing or holding out for a better deal could be a mistake.

One danger is that knowledgeable buyers will avoid your listing. Also, brokers may take your listing but give your house short shrift if they think your price makes showing your home a waste of time.

Another problem with pricing too high is that your buyer may not be able to get a mortgage. Even when the buyer and seller agree on a price, the lender often won't make a loan if the appraisal comes in lower than the asking price.