Trading up - what's the right strategy?

1) Then you can't afford to trade up, and the new economics don't work for you
2) Always sell first
3) See #2 or start bidding once your place is in contract

MMC- we just went through the trading up process. Obviously, we listed our apt first. We priced it well, got some offers, but nothing concrete. Dropped it again, nothing. Dropped it a third time and got it to contract withing 45 days of initial listing. During this time we looked agressively, and even through out some offers, but no good broker took us seriously until we got to contract and buyer's mortgage approval on our initial place. We did not want to be in a position of holding 2 apts even assuming arguendo we could afford to.
We went to contract on our dream apt. before our buyers were approved by board. Our apt. closed and we closed on our purchase about 6 weeks later. This required us to find short-term rental in the mean time, thus resulting in 2 moves, storgage, etc. Yes, a pain in the ass. But now that we have our 3br in GV im a pig in shit.
It was 100% worth it. We listed our apt. on 2/1/09 and moved in 12/1/09 to our new apt and did a few months of work to new apt. In light of everything, thats pretty quick. It involved a lot of work, getting both boards to move fast, but again, 100% worth it.
We didnt get as much for our apt. as we could have 18 months ago but we NEVER would have been able to afford the apt. we bought 18 months ago.
GOOD LUCK! IT CAN WORK!

Watch the carrying costs. they never go away.

brilliant.

Thanks tojc - an inspiring story!

Would love to hear any other "Trading Up" stories/experiences....

Listed my apartment for sale 6/1/09
Went into contract on sale 9/1/09
Had accepted offer for purchase on 10/10/09
Due Dilligence delayed contract signing and eventually high offer came through 11/1/09
Went into contract on purchase on 11/18/09
Moved 12/1/09
Closed 12/2/09
Submitted board package 12/20/09
Need to renovate new apartment. . .

We traded up in a decidedly up market in the Spring of 07. We had purchased 3 years earlier in a walk-up on the east side. We had made clever renovations and had increase the value of our property nearly 3-fold. We decided the time was right for us to move on, given the appreciation and our family planning drivers. We began looking about 4 months prior to listing our place to get a feel for the market. We found a place we loved and came close to trying to make it work with a bridge loan. The risk just seemed to great at the time; it is a decision we have somewhat regretted, but we don't lose sleep over it.

When we listed our place, we had 3 offers in 30 minutes (seriously) and were in contract with a best & final 5 days later for 5% above ask. The pressure was on to find a new home! We stepped up our efforts and went tirelessly to open house after open house. We were outbid on 3 apartments, despite bidding above ask on 2 of the 3. We finally found what we were looking for; a pre-war with charm, in need of some light renovation, for a price that was about 10-15% below comparable market units. We had a brief negotation and signed a contract.

Here is where it gets interesting. We had both closings the same day! We packed up and moved out on a Tuesday afternoon, closed on our sale Wednesday morning, had lunch (celebrating our anniversary!), close on our purchase in the afternoon, and moved in that afternoon/evening. It was the craziest 24 hours of our lives.

Being that we were able to both buy & sell at the peak worked out OK for us. Our building has done very well despite the weakness in the market and we love our place. We will probably trade up again in a year or so. I think you can make a trade-up work in any market condition. You just have to be clever, do plenty of research, talk to lots of people, and make the necessary compromises to get a good deal. Good luck!

See if you can get the sellers to agree to a contingency sale - we have been able to convince our sellers to this. You won't get a huge break on price, but it will shield you from having to go through with the purchase if you can't sell your current apartment. It may be tough to convince many sellers to this type of contract, and most sellers will require some type of broken deal fee if the purchase does not go through.