A lot of conversation goes around buying your FIRST home. But does anyone talk about the unique and terrifying experience of selling your first to buy your second home?

I have 7 clients doing this right now - all at various stages and ALL FREAKING TF OUT. So… let’s talk about the second home purchase and how you, my loves, can avoid playing yourself and come out wealthier and happier on the other side.

Things You Think That Probably Aren’t True:

• I should be able to buy another house before getting mine under contract (or at least on market)

Monie Says: no. This almost never works unless it’s a buyer’s market or the property you want is very specific with no other interest. Would you want to be contractually tied to a buyer whose home wasn’t sold or on the way to sold yet - of course not. If you want to level up your living, you need to be *committed* to it. Commitment looks like being serious about selling knowing that once you get serious, the right house will appear (it always does)… and don’t worry you won’t be homeless - unless you hire a boneheaded REALTOR.

• I should be able to buy a bigger or better house without my monthly payment going up.

Monie Says: lol wut? This is rarely a thing however what IS almost always true is my clients are able to pay off considerable debt and have an adequate down payment to avoid PMI - this has a net effect of keeping their monthly expenses with the new mortgage about the same, meanwhile they are in the better house for them. Being able to pay off debt with the equity from your first home and concentrate that money on paying down your new mortgage in a better home is muy bueno.

• I shouldn’t get started until the rates are as low or lower than when I first bought my house.

Monie Says: *SMDH* While you’re doing this, you’re ignoring that sales prices are climbing. Remember when rates drop, prices go UP and Phoenix has had steady price increases for decades now. I know you think you’re playing the system by doing this but you’re just playing yourself. Any benefit to the lower rate gets canceled out by the higher price - but you can’t refinance a higher sales price but you CAN refinance to a lower rate. The same goes for those of you who want to “save up” - most of you will never be able to save fast enough to outpace the Phoenix market appreciation. Additionally, when rates are lower there is more competition with other buyers - buyers who don’t have a home they must sell in order to perform. Yet another reason to recalibrate this thought so you’re not priced out and now trapped in a home that doesn’t work for you.

• I should keep my current house as a rental even though I’ve owned it for years and haven’t managed to save two nickels.



Monie Says: I love this idea and there are ways to do this - like a home equity line of credit HELOC to fund your new down payment. However most of my second timers don’t understand what this entails. They have debt to pay off, they’re very payment sensitive already yet they have stars in their eyes about being a landlord. The truth is doing this takes a lot of discipline and risk tolerance that most haven’t developed yet - how do I know? They don’t have savings, their bills are high, they freak out when they have to come up with $300 to repair something in their current house - now you want to be responsible for TWO house payments and properties to maintain? In this case it’s my opinion that it’s better to use your first home's equity to just pay everything off and aggressively start building equity in the new house. Buy the house you and you family need knowing that from day one, the goal is to throw as much at the mortgage as possible to get your equity up so you can take out that HELOC ASAP and become the slumlords *cough* sorry I meant landlords you all aspire to be!

Alright you second timers, let’s dry our tears and get focused and committed - we have debt to pay off and wealth to build in your second homes!

Love you,

Monie

Associate Broker

Jason Mitchell Group