By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — Affordable home prices and low interest rates have lured investors and first-time home buyers into the housing market, but move-up buyers are a tougher sell.

Many homeowners are simply stuck in their current homes because of an underwater mortgage. Others are concerned about the timing of transactions so they can seamlessly move from one home to another — at a time when houses typically spend more days on market and thorough mortgage underwriting can make for unpredictable closing schedules.

SPRING REAL ESTATE

Spring thaw?

Encouraging reports on the housing market are stirring up optimism
about this year’s home buying and selling season.
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Video: Fighting Irish defend real estate market

Competition starts to grow

The housing market still favors the buyer, but signs point to it slowly
emerging from the doldrums. In many areas, buyers can no longer count on
rock-bottom deals.

SLIDE SHOW

Upgrades we want most

When homeowners plan for their next house, or plan the remodeling projects
that they want to undertake on their current home, there are seven priority
spaces that they are focusing on.

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See
the full report on spring real estate

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In fact, some say that when move-up buyers return en masse, that will be a sign of a healthy market: “To me, one of the bigger indicators of the market stabilizing is the realization of people that they can buy a home and sell a home,” said Steve Berkowitz, chief executive of Realtor.com.

All that said, sometimes people simply must move. Their family expands and they outgrow their space. They get married. They relocate for a job. Life goes on.

Thankfully, it’s not impossible to make a double-sided transaction work these days, especially in markets that are showing some signs of bouncing back, in terms of sales and prices.

“We are seeing sellers realizing that even though they might not be able to get as much money for their property as they hoped … they’re able to get so much house for their money now, they’re able to balance that and it makes sense for them,” said Jessica Edwards, consumer specialist for Coldwell Banker Real Estate, and a real-estate agent based in Wilmington, N.C.

That’s exactly what happened for her clients, Susan and Adam Webb, who set out late last year to move into a home that would accommodate plans to expand their family.

They took a hit on the sale of their Wilmington home bought only four years ago, but were able to buy another home with a low-down payment Federal Housing Administration-insured mortgage. The Webbs had a contract on their existing home 60 days after they listed it, and were able to move directly from one home into the other.

“Realistically, we were in no rush to sell the house. We were expecting [to have it on the market] for six-plus months,” Susan Webb said. They listed the home the week before Christmas, and while there were no showings for the first three weeks, a string of interested buyers started walking through after the holidays. “We ended up getting a couple of offers in one weekend,” she said.

Of course, a move like this takes careful planning.

In struggling housing markets, some home sellers won’t allow a contingency on the contract that states you need to sell your home before you will complete the purchase. Plus, don’t count on getting a bridge loan, a temporary loan that allows a buyer access to the cash needed to make a down payment on a home while their equity is still tied up in their former place. Many banks aren’t making those loans these days.

Those interested in swapping their existing home for another this year should consider some of the steps Susan and Adam Webb took to make it happen for them. Below are several.

Learn the market

Early on, you’ll want to interview real-estate agents and understand what your home will realistically sell for. If you don’t have the equity to sell your existing home and come up with a down payment on another home, your process may stop right then and there.

After making the decision to follow through, educate yourself on the market. The Webbs, for example, searched for a home for three months before their existing home went under contract. That helped them stay aware of what was on the market so that when it was time to get more aggressive and put in an offer to buy, it didn’t feel like it was a quick decision, Susan Webb said.