Selling a House and Buying a New House - $$$

Ok, so if I sell my house now - we know we will make a very good profit - we will use the profit to but a house which will be a little more expensive than the one we are selling. My DH thinks that we will not have to put out any extra $ - ex from our savings or anything because there will be enough from the sale. BUT how does the timing work and everything? Wouldn't we have to close on both houses in the same day or something? I'm confused

Re: Selling a House and Buying a New House - $$$

We did this. You have two options.

1. If you already found the home of your dreams but have yet to sell yours...You are not supposed to tell the bank you are selling when you apply for a HELOC loan. The Home Equity line of credit will allow you to cash out the equity in your current home and put that money down at contract. It can be a bit nerve-racking though in this market. This is not the seller's market it was even 6 months ago when I sold. You may have a few months that you own both houses.

The other option...

2. If you haven't found your second home yet you should put your house on the market. Many homes, even those in good shape, are taking a lot longer to sell because there is twice as much inventory out there as there was a year ago (this was in Newsday this week). For example, there are now 6 houses within one block of my Dad's house in Plainview that are for sale... at least three of them have been on the market for at least 6 months. The market for smaller house sales and coops is still pretty good but houses over 500K are taking a lot longer to sell.

If you get an offer get them into contract asap and don't stop showing until you have a fully executed contract. Our first buyer, a local couple who my MIL taught, flaked on us when we were selling FSBO. They didn't even have the decency to call us and tell us they changed their mind. They just sent the contract back unsigned two weeks later. We had continued to show but we told everyone we had an "offer of first refusal". If I had to do it again I would have kept my mouth shut because one of those people could have made an offer. Instead we had to wait another week... and yes, make a mortgage payment on two houses.
Tell anyone who makes an offer, 48 hours to do an inspection and you must be in contract within the week... fully executed.

Have you contacted your attorney yet so he/she can be ready to go.

Good luck

Re: Selling a House and Buying a New House - $$$

When we bought our house the people we bought from were in the process of buying a new house. So they sold to us THEN found a house. We were in contract.

What you could do is a bridge loan or a heloc on your current house. I work for Washington mutual and do Helocs. There are no closing costs but.... If you close it out there are pre payment penalty's. But might still be cheaper/better then the bridge loan.

Good luck!

Re: Selling a House and Buying a New House - $$$

i don't know if this applies to you, but do you know if there is a tax penalty you will incur because you have only lived in a place for 2 years?

curious, how do you figure you will definitely make a profit? we have been in our house just shy of a year, and if i had to guess, given the way the market has cooled off a bit, we would lose quite a bit if we sold now.

the costs of closing, moving, agents commission, and potential 2 mortgages, would probably exceed any gain we personally would make. i have no idea, but it's just a hunch...

Re: Selling a House and Buying a New House - $$$

FYI do not list your house until after you get $$ from the HELOC or refi as most lenders check to see if your house is listed and will deny your loan if it is!

Re: Selling a House and Buying a New House - $$$

Wow, thank you all for the info I truly did not realize all that. We haven't done anything yet...prob just going to go to a few open houses, etc check out the area we are considering..

someone asked how do i know i will make a profit - we paid $279k in 2004 for our house and similiar houses in our neighborhood (we are in NJ, not LI) are now going for the $400k plus range...

Re: Selling a House and Buying a New House - $$$

This is tough- we are going through it right now. We just sold our condo and will close in about 35 days now. BUT we don't have the new property- the one we thought we had fell through.

So we are probably going to have to move twice

Re: Selling a House and Buying a New House - $$$

Re: Selling a House and Buying a New House - $$$

Re: Selling a House and Buying a New House - $$$

Re: Selling a House and Buying a New House - $$$

Re: Selling a House and Buying a New House - $$$

I was told by my accountant that it is a percentage, but the percentage of the $250K profit limit (or $500K married)

so if you are there 1 year, you only pay capital gains on profits of more than $125K ($250K married)


we sold in less than 2 years, but fell into an exception for the rule anyway, so I am not 100%




It is $250K if you are single and $500K if you are married and you do not have to pay any capital gains if you use the profits you make towards the purchase of another home.

To answer your other question about timing on the closings. I closed on the sale of my home the day before we closed on the purchase of our new house. I was given 5 days that I could stay at my old home before the new owner could take possession. We moved out after two days. If you are able to time everything as close as we did, you should make sure your attorney writes this clause into you seller's agreement too.