Q for people who have bought and sold homes

Last experience was as a first time home buyer so if we were to consider selling and moving, how does the process work? Do you sell first? Look first? My DH thinks we would have to save more $$ so we have the money for closing costs in cash. I told him that is ridiculous bc once you have a mortgage, taxes kids, life insurance, etc., it's not easy to save $20K extra just to be able to move. (we do have some savings and investments but he thinks over and above what we save and invest now)

How does it work to be able to buy and sell without being homeless or sitting with 2 mortgages?

Any advice is appreciated.

Message edited 8/1/2008 7:48:25 PM.

Re: Q for people who have bought and sold homes

find a buyer for your home. then go out looking for a new home. if you do it the other way around, you could stand to either
1- bore the owners of the home you want by having to wait for your home to sell, and they move one
2- they wait, you get the house, your buyers back out and now you could potentially have 2 mortgages (if you don't back out of your deal).

you could stand to lose a lot of money this way.

def sell your house first....

Re: Q for people who have bought and sold homes

I've never sold a house before, but I lived with my parents when they sold their first house. What they did was sell theirs first, closed and then went and looked for their new house. They had to rent an apartment in a complex for 2 months, but it was well-worth it for them. They put all their things in storage and it was still cheaper than having to carry two mortgages, plus they had their money from the sale of their home.

Re: Q for people who have bought and sold homes

We bought and then sold. Although once we went into contract for the house we were buying, we were more active in trying to sell. As it turns out we are just narrowly avoiding having 2 mortgages, since there is a 1-2 month grace period after you close before you owe a regular mortgage payment on the new place. You also need to see if you qualify for a new mortgage while still carrying the first one, otherwise the bank is going to make your mortgage contingent on the sale of your old home (which people in this market probably won't wait for so you will be low on the list of prospective buyers if you end up in a multiple offer situation).

The people we bought from got screwed because they put their old house on the market before the deal on their new house was finalized. For whatever reason that deal kept getting pushed back and finally their buyers walked. Unfortunately for them (but fortunate for us), the market turned and they had to sell.

Re: Q for people who have bought and sold homes

We tell our clients to SELL first and wait until your buyers get a commitment before you put an offer on a house. That can take between 30-45 days. In the meantime....we tell them to start shopping around for mortgage people and provide them with all of your financial paperwork so that when you finally find a place....your mortgage is pretty much done...all they need to do is appraise your new house. In todays market....with mortgage requirements constantly changing....i would be nervous to buy and sell at the exact same time. 99 percent of our deals are not contingent upon the sales of our clients homes. So if you go into contract at the same time and you get a mortgage and your buyer dont....you HAVE to proceed with the purchase....or else you are in default! paying for two mortgages is never fun!
Good luck!

Re: Q for people who have bought and sold homes

Re: Q for people who have bought and sold homes

Message edited 1/30/2009 3:13:29 PM.

Re: Q for people who have bought and sold homes

We did this 3 years ago, but the market was still just changing from sellers to buyers. We put our house on the market, but we had the downpayment to make on another house and the bank approved us to have enough to make both payments.

We plan to list our house in 2 years and we will sell it first (contracts) and then put bids on houses to buy. We figure that if there is a time where we are homeless, we will put our stuff in storage and move in with my parents.

The sellers of our current house took out a HEL for the down payment on their new house (but they had bought in 1995, so the house had more than doubled in value)

Are you thinking about selling soon Liz?

Re: Q for people who have bought and sold homes

my friend found the perfect house before her current one was put up on the market, so for about 4 mths she carried 2 mortgages (bridge loan). It was very stressful for them but eventually they found a buyer. Not the ideal way to go but I guess it's easier said than done to let your dream out slip by....