Buying a home before you sell yours.

By
Real Estate Agent with Prudential Fox & Roach Realtors
the idea of buying before you purchase.
       
        In this current market I think it is advisable to try to sell your house first before you offer on one to buy. But...
       
        It's a buyers' market right now. There have been houses for sale in many neighborhoods for months now. Yours is a super place and if priced and marketed properly, I'm sure will sell in a reasonable period of time. Today, that means 2-3 months.
       
        We could offer and put a contingency in the offer that your current home must sell before you can purchase. That way you are not tied with two mortgage payments.
        Problem is that most Sellers may not accept the offer structured this way.
        What we could do further, is to put in a clause in the contract called  a "first right of refusal." What this means is that the sellers have the right to continue to advertise and show the home to prospective buyers, but if they get another offer you will have the option to either go ahead and purchase the property or let it go. Within a predetermined period of time (say 2-5 days).
       
        There are no real rules on this subject, it is a juggling match.
        Controversy and debate always surround this question!
       
        Apparently, people who are faced with this question think that they should first find their next house and put it securely under contract. There is and are good grounds for this choice, although it is often the least prudent option of the two choices that are available.
       
                By first finding your new home, you will:
                - Know how much money (or equity) you will need to take out of your existing house in order to afford the new one.
                - Know when you will need to finalize the sale of your current house in order to move into the new one.
                - Know that you will have somewhere to live when you move out of your existing house.
       
        Although the logic behind these reasons is more than sound, most people who are experienced in "moving up" or upgrading to another house will argue that it makes more financial sense to list your house first, and then begin the house Buying process.
       
        Another option, is the financing way.  If you have the equity in your home, you take out an equity loan (short term) to carry the equity towards the new purchase for down payment or closing cost coverage.
       
        A reputable lender may be a source of advice here. The credit markets have changed and tightened (daily) that some of these options have gotten very limited. Although the benefit of this tightening of credit, has lowered mortgage rates - making it the time to get these loans. But even that seems to change every few days.
       
        I guess this is a GUIDE BOOK of sorts. I am just trying to give you the options and the pro's and con's of buying a home before you sell your present residence.
        'Til next time....
       
        Cheers,
       
        Tom Higgins
close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Tags:
buy
sell
real estate
homes
equity
move up
moving up
advice
guide book
mortgage
mortgages

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
241,241
Benjamin Clark
Homebuyer Representation, Inc. - Salt Lake City, UT
Buyer's Agent - Certified Negotiation Expert

Welcome to Active Rain! For some tips on how to get started here, check out my blog entry at ActiveRain Fast-Start Tips for Quick and Easy Points

Happy blogging and good luck!

Mar 29, 2008 12:12 AM #1
Rainmaker
557,732
Keith Elliott Jr
KEIRE Realty Group - Manassas, VA
Principal Broker/Owner

Hello Tom,

Welcome to Active Rain and congrats on your first post! The opportunities to learn and network are incredible here. Best of luck to ya!

-Keith

Mar 29, 2008 12:40 AM #2
Anonymous
Anonymous

Tom - Welcome to the Rain, make sure that you browse the site and become familiar with everything this site has to offer.  The more you browse the more you will learn.  I have found this site to be really helpful to me.  If you have any questions, please don't hesitate to email me, I will do whatever I can to help.

http://www.doreneshirley.com/

Mar 29, 2008 06:32 AM #3
Rainmaker
695,797
Kay Van Kampen
RE/MAX Broker, RE/MAX Solutions - Springfield, MO
RealtorĀ®, Springfield Mo Real Estate
Tom, welcome to Active Rain and on your first post.  This website is filled with wonderful useful information that will help you drive your website to the toop of the search engines.  I also welcome you to join our group of RE/MAX Active Rain Bloggers.  Enjoy your walk in the rain!
Apr 01, 2008 09:28 PM #4
Post a Comment
Spam prevention
Show All Comments
Rainer
5,765

Tom Higgins

Tom Higgins
Ask me a question
*
*
*
Spam prevention