How to make the transition from first- to second- home?

I’ve been in real estate for about 6 years and recently I’ve been seeing some familiar faces. Some of my earliest clients have outgrown their first homes and have come to me for help in making the move to a second home. The question becomes how to sequence the transactions with minimal inconvenience. Financial circumstances will determine which of the three options — buy first, then sell; buy and sell simultaneously; or sell first, rent, and then buy — is the right way to go for a given client.

Buying first and then selling is certainly the most ideal situation — there is no timing pressure and just a single move to coordinate. However, this is also the most difficult financially as most people are unable to cover the downpayment and monthly expenses of their new home while continuing to carry the old. This is particularly true if the second home is going to be a co-op since co-ops require prospective buyers to meet certain debt-to-income requirements which would almost certainly be based on the carrying costs of both apartments. So while buying first and then selling is clearly the simplest option, it's just not feasible for many folks.

A second option is to buy and sell simultaneously. If it's too expensive to carry both homes at once, you could - theoretically - close on the sale of your current home and then, minutes or hours later, use the sale proceeds to close on your new home. In reality, closing dates are very difficult to line up, and the proceeds may need to be liquidated to meet other approvals along the path to purchasing the new home (such as for clearance on the loan or approval by a co-op board), so there will usually be some gap between the sale and the purchase. However, since this period is limited and there is reasonable certainty about how long such housing is needed, many inconveniences related to the move can be avoided without great expense.

The downside with attempting to sell and buy simultaneously (of course assuming a proper home is found during the pendency of the sale) is that the offer on the purchase may be much less competitive if there is any doubt about whether the sale on the existing property will go through in time. If a buyer lacks the funds to cover the new downpayment without the proceeds from the sale, a “sell first” contingency could be included in the offer, which would allow the buyer to back out of the purchase (and get the 10% deposit back) if the sale falls through or is delayed. A “sell first" contingency significantly weakens an offer, however, so it is generally reserved for purchases where there is little to no competition from other prospective buyers or the buyer is willing to substantially overpay. It can be possible to avoid a “sell first” contingency and still have minimal risk depending on the timing; if there are no conditions left (board approval, bank commitment letter, etc.) for the closing on the sale, it may be worth the risk to move forward without a contingency.

The most common option is to sell first, rent for a set period of time (usually we recommend a 6-12 month lease term), and then buy. This way the proceeds from the sale are liquid and can be used without any financial constraints or contingencies on the next purchase. Of course this option requires multiple moves, and there is also the unavoidable uncertainty about how much time to commit to the rental. While this can be a hassle, selling first provides the most flexibility for the next purchase by making the seller-turned-buyer more financially qualified (i.e. competitive) and by removing any pressure on having to find the perfect "forever" home before a deadline.

Clearly there are numerous routes available when transitioning between a first and a second home, and the right answer will depend on individual, personal, and financial circumstances. If you currently own and are thinking about making the move to a new home, I would more than happy to speak with you about your options. Together we can figure out the best way to make your transition as seamless as possible.

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What is staging?

The Isil Yildiz Team staged this listing for a studio which received an offer after the very first open house. For larger projects, we have a roster of top stagers that we can help you engage.

A few months ago, we sent out a newsletter with design tips — how to spruce up your apartment and prepare it for sale. However, one thing we didn’t cover was what to do when you have an empty apartment. Empty apartments, no matter how visually appealing, force potential buyers to use their imagination to come to a reasoned conclusion, rather than just react with emotion at the onset. While most of us think we are logical beings, the truth is emotion plays a huge role in many of the decisions we make, especially with something as personal as buying a home. Logic can re-affirm these emotional reactions, and presenting a beautiful “home” rather than an empty space can be a powerful marketing tool in selling a home. For empty apartments, this can mean full-scale (placement of actual furniture and decor) or virtual (digitally added) staging.

Full-scale staging can be expensive and is usually reserved for larger, more expensive properties where the return on investment makes sense. For example, a townhouse or 3-bedroom apartment may cost $15-$30K to stage for the duration of the listing, but this expense can be more than justified if it shaves a few months off the listing time or results in even a 2% higher price. For smaller apartments, even a minimal investment in staging can help prospective buyers get a better sense of scale since people tend to underestimate the size of an empty apartment. I’ve seen many people point to a 10+ foot wall and claim their couch wouldn’t fit, when in reality, it would, with room to spare.

In my experience, different stagers can produce drastically different results, and some agents are able to do a spectacular job on their own or can recommend boutique stagers or designers to create a truly unique and stunning apartment. I find that the larger, more commonly-used staging companies in the market produce results that look a little “cookie-cutter” (think the items the Ramada Inn got rid of during their latest renovation).

With effective and high level virtual staging, the Isil Yildiz Team difference captures what made this property unique, and helps bring the empty space to light. The listing sold at-ask with an offer after the first open house.

A more cost-effective option, and one we employ for many apartments and rentals, is virtual staging. Virtual staging cuts out the cost and hassle of full-scale staging by using advanced software to place items into the space digitally. Want an Eames chair in the living room and an antique mirror in the bathroom? No problem. Virtual staging can certainly transform a space, but again, there are huge differences between the good and bad. Bad virtual staging is quite obvious — e.g., no shadows created by the furniture — and looks like stickers on an image. Good virtual stagers pay attention to the smallest details; they understand the angles created by light and can simulate creases to drape blankets and linens realistically. While it is not quite the same as being in a space that is actually decorated to the nines, the first impression of the property — viewing the listing online — gives the buyer a glimpse into its potential, provides a sense of scale, and captures the imagination.

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What are small improvements to prepare for sale?

Interior design is highly personal - everyone has a slightly different idea of what a "beautiful" home looks like. However, when listing your home for sale, it’s important to make design choices that are as widely appealing as possible, to ensure that prospective buyers feel comfortable and at home in the space. While a major renovation for the sake of appealing to more buyers is usually not a sensible investments, small tweaks can mean the difference between multiple offers and hoping for the buyer who can see past your personal choices. When trying to connect with a larger audience, it’s best to stick with décor that is clean, modern, minimal, and cohesive. I often rely on mass-market brands like West Elm and CB2, who make a business of appealing to a wide and urban audience, for design ideas and inspiration. Here are my top five strategies for tweaking an apartment from niche to "nice" for the most people.

1. Use Cool Paint Colors: Cool tones (blues, greys, greens) create a space that feels calm and quiet. Lighter shades in these family are also the best at reflecting (thus maximizing) light. Darker shades in these tones make for interesting accent walls or a great wall to make strange nooks look purposeful.

​ 2. Furniture to Scale: Make sure your furniture is scaled to your home. This doesn't necessarily mean physically small items work better, it's all about the amount of visual space items take up relative to the amount of space. A tailored sectional is much larger than any single armchair, but an oversized, cushy armchair will dwarf most small spaces. I find this to be especially true with dining chairs. Even sleek chairs can take up visual space and appear like blocks, but sleek items, particularly those that are wire, caned, or acrylic recede from view. 3. Pinterest Worthy Vignettes Use specific furniture and accent items to highlight the best features of each room – if you have a large corner window, or a particularly beautiful kitchen island, create a vignette that will to draw people’s attention to it. My go-to vignette is a tall item (vase or candlesticks) next to a stack of design books, with an interesting object. 4. Decluttering Make sure there is “white space” in every room – clear surfaces, open space on shelves, etc. A room rarely looks good with every square inch filled. Bookshelves over-flowing with books, piles of paper, collections of random décor items – unnecessary clutter often makes your home appear overwhelming, and thus unappealing, to prospective buyers. 5. Impactful Minimal Décor: Rather than filling every inch of wall space with random art, thing about wall decor as vignettes. Whether it is an oversized painting or a cohesive gallery wall, your art work should create an impact.

These small improvements can make a big difference, but there are more than just simple design and decor items that affect a home's price. To see how we value a home's physical space, read about our top factors here.

Investing in physical improvements of a home can increase its sale price dramatically, but can be costly depending on the service. With the Compass Concierge Program, Compass will pay the upfront cost of select services that can increase a home's value. From deep-cleaning to cosmetic renovations, we'll elevate your home's appeal and create a tailored plan to maximize its potential on the market. When your home sells, the cost (and nothing more) will be added to the commission.

This apartment was cleaned, staged, and painted with funds from Compass Concierge. These services, supplemented with decor and styling by the Isil Yildiz Team, gave this Park Slope brownstone a fresh, modern update to maximize its appeal.

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