While many people in Toronto are rushing to cash in on the rising market prices of condos, perhaps you have come to realize that the condo lifestyle is not for you. Maybe you are searching for a bigger yard or to have your own private garage – whatever the reason, upsizing your life is exciting. If you are trying to sell your condo to buy a house here are some key tips to keep in mind.
Create A Timeline For Your Goals
Some people look to upsize immediately once their family begins to grow and others will only consider it once they’ve saved up enough money for a down payment. Either way, make sure you have enough time to sit down with a financial advisor to devise a plan. A financial advisor can help to outline your future financial goals with a budget that can realistically help you achieve those goals.
Budget For Upfront Costs
Some of what you can expect to learn from having a conversation with a financial advisor about selling your condo to buy a house are upfront costs. These are costs related to the purchase of the house, but not the house itself. For example, you will need to budget for items such as a home inspection, moving costs, land transfer costs and property tax adjustment costs (if previous owners prepaid for property taxes that year). Other costs that could be included would be renovation costs, costs of new appliances and/or furniture, as well as a property appraisal.
Set Up A Rainy-Day Fund
Many people who are selling their condo to buy a house jump for joy that they no longer have to pay condo fees. However, it is important to note that if anything does happen to your new home, it is now your responsibility rather than the building manager’s. You will need to create a fund for these rainy-day events because while we wish that your furnace never breaks, it is possible that it will act up.
Set Up An Emergency Fund
In addition to creating a rainy-day fund for repairs and maintenance for your own home, it is prudent to also create a fund for emergency repairs. These are different than the repairs that are covered by the rainy-day fund, which can include purchasing a new lawn mower or buying light bulbs. An emergency fund will cover large projects that require immediate attention such as installing a new roof or fixing a leak in your basement.
Look Into Tax Credits
There are plenty of tax credits available to homeowners that you should investigate to lessen the cost of your new property. If you were a tenant at your condo rather than a homeowner, you can look into first-time homebuyers tax credits. If you work from home you can also claim expenses related to your home (internet, home phone, heating and electricity to name a few). If you are buying a fixer upper and want to renovate your home, there are many rebates available that can lower the costs of these projects. Many of these rebates are available specifically for replacing appliances, upgrading insulation, replacing windows and installing eco-friendly thermostats. If you want more information about how to cut the costs of purchasing or renovating your new home with tax credits, please speak to a tax specialist.
When it comes to selling your condo to buy a house, planning ahead is one of the best things you can do. The lifestyle changes can be quite remarkable, and you want to make sure that you smooth out any kinks related to your new purchase. Always do your homework and keep on top of your research by speaking to a professional on any topic you have questions about. If you have any questions about selling your condo to buy a house, I would love to be of assistance!
