FOOL'S EYE VIEW
Move Your Way To Greater Wealth

By David Kuo (TMFDragon)
May 9, 2002

Moving house is said to be one of the most stressful activities in life. It is up there in the league table of unpleasant experiences that include divorce, bereavement, changing jobs and in my own case, mowing the lawn. But what exactly is stress and why is moving house just so unappealing for some people?

Stress is regarded as our body's way of adjusting to change. However, far from being a negative factor, if managed correctly, stress can have a positive effect on the way we adjust to change. Amongst some of the more beneficial aspects of stress is to spur us from a state of inactivity into a position of higher awareness. Of course, the downside of stress can be feelings of rage, anxiety or depression.

However, there is no denying that moving house can be quite an ordeal. We all move house for various reasons. Sometimes the move is self-inflicted, because we just want to get a bigger pad. In other situations, it could be due to changing jobs. But whatever the reason for the change, moving house will bring about major variations to our comfortable daily routines. And what is even scarier is that most of those changes will take place simultaneously. Under normal conditions, small changes to our daily activities can be manageable but not if they all take place at the same time. It can be quite overwhelming and we soon lose our perspective of what is really important and what is not.

We should bear in mind that moving house is nothing more than a simple two-stage transaction. The first step is the process associated with buying your new place of abode and the second is the disposal of your current home, preferably in that order. And if you keep in mind that moving house is nothing more sinister than this very easy two-step transaction, the anxieties associated with relocating soon melts away.

Affordability

Your first focus of attention must be on just how much you can afford to pay for your new house. This will be decided by how much you can borrow, the amount of equity you have in your present home and how much additional capital you have salted away. Your mortgage lender will decide just exactly how much you can borrow but remember to shop around for the best deal. Next, the amount of equity you have in your present home will be determined from the valuations that you get from various estate agents less your existing mortgage. But remember to get valuations from various sources. And finally, your amount of free capital will be determined from your personal financial healthcheck. Now that you know what you can afford to buy, there's no point in looking at houses beyond your price range -- this will only add to your stress. One good point to remember is to knock a good 10% off that affordability figure as your margin of safety.

Selection

Once you have decided what you can afford, you then need to narrow down the possible locations that you can afford to move to. This will be governed by such issues as proximity to schools for the children, closeness to key transport points and other issues that you might deem important. If you plan to use an estate agent to help you find your next move, then let them know all your requirements. If they are any good, they will do all the necessary filtering, However, give them a rap on the knuckles if they start to stray from your criteria and send you details of houses that bear no resemblance whatsoever to your instructions.

Buying

Once you have found your ideal home, you are then ready to make an offer. But you must make it clear to the vendors that the offer is subject to the sale of your existing home. You have now completed step one of your two-stage relocation plan. You are now ready to start with stage two, namely marketing your present home. You might well be wondering why it is better to decide on your purchase before executing the sale. The answer is quite straightforward: the house that you buy will be your home for many years to come. For this reason, you will want to devote as much of your resources to finding this property. Remember, moving house is not an activity that you want to do on a regular basis and finding the right house can be stressful, doubly so if you have potential buyers on your back.

Selling

You've done all the hard work, found the right house to move to, so now's the easy bit -- getting that old house of yours onto the market. Get those estate agents working for their commission and remember to price your house at the top end of the valuation forecasts. It is, of course, much easier to drop your price if you really need to rather than have to raise it later on. Additionally, you still have that 10% margin of safety to play around but that's going to be your bonus for doing a good job at buying and selling your home.

Try not to get too bogged down by the minutia of the relocation process in the early stage of the relocation process. Look to the bigger picture of sorting out the affordability, selection, the buying and the selling of your home. When -- and only when -- these bigger issues are out of the way, you can start to focus on the minor details. 

Related links: Make Yourself Richer By Selling The Sizzle | Only Buy When The Price Is Right