If you’re a homeowner looking for something a bit bigger or nicer, you might find yourself selling while simultaneously shopping the market for a new home. If moving to a new place will mean scoring a better property or paying a higher mortgage, you’ve likely been referred to as a move-up buyer.
“Move-up buyers can be many different kinds of people,” says Dominic Labriola, a founding partner and the COO of Craft and Bauer Real Estate Co. “They might be a growing family who needs more space or who want to get their kids into a certain school district when they come of school-age. They might be someone seeking more status by moving to a more upscale residence or area to showcase their financial success.”
So what does it mean to be a move-up buyer when shopping for a new home, and how can you best navigate the move-up market? We spoke to some real estate experts who shared their top tips on moving up in the real estate game.
Who‘s Considered a Move-Up Buyer?
A move-up buyer is anyone who currently owns property and is looking to make a vertical move.
“A move-up buyer is an existing homeowner that has built up equity in their home and may have possibly outgrown their existing home—therefore, the perfect buyer in today’s market,” says William Ashman, a senior agent with real estate firm Avenue 8. “They’ve got a larger chunk for their down payment, making their payments lower and their offer more competitive.”
Ashman says that, in general, these buyers are in the market to gain more overall space for their families. Many are looking for second homes, having outgrown their starter home. Some married couples are looking because they can finally afford their dream home. And others might be moving after their children go off to college, yet still looking for something bigger and better than their current property.
Labriola says that move-up buyers are often looking for more amenities and luxury features for their next homes.
“Move-up buyers are typically hunting for something that they think will make their life better, improve the lives of those they live with, or impress their social network,” Labriola says. “They might be looking for a better house in the neighborhood they want, or they might be seeking a better location.”
Buyers may also be looking for features that aren‘t available in most homes on the market at the moment.
“They might also be looking for more flashy amenities,” says Labriola. “Maybe it’s an entertainer’s backyard with a fancy pool to impress their friends or a gourmet chef’s kitchen if they do a lot of entertaining.”
There is no set demographic for move-up buyers; Krissy Many, a broker manager for the Better Homes and Gardens Real Estate Green Team, says these buyers might be moving out of a single-family home, a townhome, or a condo.
“The point in life and age people are looking for their move-up home varies,” says Many. “On average, it seems to be the 35-55 age group. This demographic is often settled into careers and experiencing life changes such as marriages, job promotions, and family growth.”
What To Look For In a Move-Up Home
As you house hunt, get clear with your real estate agent on what's on your wish list for your next property. You might want more space in the form of additional bedrooms and bathrooms, a bigger office for your work-from-home job, or maybe a larger basement for storage.
It could be that you’re interested in a different part of town, where homes are located on more spacious lots. Your next dream home might be one with a pool or deck—both outdoor features that raise the price of a home. Whatever's on your checklist, get clear on these wants and needs as you shop—and be prepared to pay a bit more for them.
According to Labriola, if location is your top concern, you might have to make some sacrifices on other parts of your wish list. But often, for move-up buyers, the good news is that previous constraints may disappear.
“Sometimes entry-level buyers have to make concessions on things like the location—maybe it’s super close to a freeway, or maybe it’s not within the district they want their kids to go to school in,” says Labriola. “As they become a move-up buyer, they may come to find that as time has passed, they're in a position to sell their current home and get something in a more prime location, or maybe their kids are finally becoming the age where they want them to be able to attend school in a certain district and moving up to a house in that district is going to make the best sense for them at this stage of life.”
How To Navigate a Competitive Market
There are seasons in real estate, and market conditions are constantly fluctuating. When you’re ready to buy your move-up home, you’ll have to contend with whatever the current reality might be.
“Historically, the greatest number of listings typically come available between February and July,” says Labriola. “But, move-up buyers should be on the lookout all the time because people selling the homes that buyers want to move-up into are often deciding to sell because of a life event outside their control.”
You might be selling because you’re a recent empty nester, or because a job change is taking you to another city. In these situation, you probably don’t have a lot of choice about when you start looking, so you’ll be tasked with dealing with the market as it is at that time. But don't stress about waiting for the perfect time to buy.
“The short of it is that you never know when the perfect move-up house might hit the market,” says Labriola.
The good news is, as a move-up buyer, you’ll have a leg up on the competition when it comes to first-time buyers.
“It's not as competitive as it is for first-time home buyers because the budgets aren't quite as big of a concern, but the demand is still great across all segments of the market,” says Labriola.
It’s more likely that your struggles will have to do with finding a home that matches both your budget and your wish list. Labriola works in California and says many of the larger homes on the market are in need of cosmetic upgrades, as the current owners have been living in them for decades.
“That being said, move-up buyers are oftentimes willing to put a budget around remodeling that a first-time homebuyer just isn't capable of,” he says. “Usually, the entry-level buyers are looking for things a little more turnkey—usually their down payment is eating up all their cash on hand while a move-up buyer usually has a little more cash in their coffers to make changes to the home to suit their needs.”
Because move-up buyers range in terms of what they’re looking for, the market can usually meet their demands. F. Ron Smith, a founding partner of Smith and Berg Partners, points out that one move-up buyer might be looking at an in-demand neighborhood with access to local amenities, while another might want to move to a city center. Still, others could be searching for a home in the suburbs.
“Being a move-up buyer is more about the season of that person’s life,” says Smith. “If they are not satisfied with their current residence, a quality agent will be able to assist in finding them what they need, no matter what time of year it is.”
The Logistics of Buying While Selling
Buying a home can be a long and difficult process—and buying while selling is another challenge entirely. The main challenge is navigating timing, which can complicate not just where you move and end up living but also what you can afford.
“Sometimes you don’t get to move in the same time as you sell your house, so it’s likely you’ll have to arrange alternative plans,” says Ashman. “Since we go through this all the time with clients, we are ready to solve these problems instantly with clients so they can move on. Pun intended.”
First, you’ll have to consider the possibility that you’ll sell your current home before you buy a new one. This problem typically leads to an issue with housing—where will you live in the interim? Where will you store your belongings until it’s time to move in?
Then, you’ll have to consider that the opposite might occur: that you buy before you can sell. This scenario could potentially affect your financial situation. Oftentimes, it can be difficult to get approved for a second mortgage if you’re currently on the hook for the first. Plus, many agents caution against making offers on homes that are contingent on the sale of your current home, as it makes you a less attractive buyer.
“The risk is a domino effect,” Many says. “If the buyer on their current property runs into trouble and can’t close, it can jeopardize the purchase of the new home. There will also likely be added emotional stress as they deal with the excitement of finding a new home while facing the uncertainty of the sale of their property, negotiations on both properties, inspections, paperwork, and coordination of logistics.”
Still, many agents say timing isn’t usually a major problem.
“There are no challenges with selling your current property and purchasing a replacement at the same time if you have a quality agent who is familiar with these types of transactions and creative negotiation tactics,” says Smith.
Working with the same real estate agent for both transactions can help, but if you’re moving from one area or state to another, you might not have the option. While this all might seem like a stressful endeavor, Ashman insists that working with the right professionals will make all the difference.
“Finding a replacement home is emotionally taxing,” he says. “My job as your agent is to help you realize that whatever stories you’re hearing about how it’s hard to find a home in this or that market is junk to my ears because the reality of buyer experience is really based on the broker you hire.”
A stress-free transaction begins with explicit expectations and good communication.
“Solid brokers set your expectations from the beginning so you’re expecting the emotional roller coaster,” says Ashman. “Communication is the key to a smooth sale.”