Buying a house when you currently own one?

[Jumpem]

How does it work? Do you make an offer on a new house contingent on selling yours? I assume you have to sell your current home in a short time frame?

 

[JD50]

Yes

 

[Sluggo]

You have the basics down, unfortunately, there are 100 ways for the deal to go wrong,and one way for it to go correctly.

 

[Powermoloch]

Does 20% down still apply ?

 

[Capt Caveman]

That or get a bridge loan. But in this market, neither is advisable.

 

[wiredspider]

is your current home already paid off?

 

[IndyColtsFan]

You can make an offer contingent on your house selling, but yes, you will have to have it sold within a certain time frame (typically 30 days) and that might be tough in the current market unless you get really aggressive with your asking price or know someone who wants to buy it.

If you can't afford 2 house payments (and even if you could, it sucks, trust me), you can think about renting your old property out but that comes with its own set of "challenges."

 

[Gibson486]

Also, getting a loan will suck....

 

[BarkingGhostar]

How does it work? Do you make an offer on a new house contingent on selling yours? I assume you have to sell your current home in a short time frame?

Although you have not come right out and said it, is you intention to own only one home in the end?

In this market, few sellers* are going to seriously entertain your offer when you have to get rid of another property. Way too much surplus inventory for the next 3-5 years for this to be better for you.

And unless your current home is paid off for which you had more collateral than debt the ability to easily secure financing also comes into question.

* The exceptions are going to be desperate sellers.

 

[Jumpem]

is your current home already paid off?

No.

 

[Jumpem]

Although you have not come right out and said it, is you intention to own only one home in the end?

In this market, few sellers* are going to seriously entertain your offer when you have to get rid of another property. Way too much surplus inventory for the next 3-5 years for this to be better for you.

And unless your current home is paid off for which you had more collateral than debt the ability to easily secure financing also comes into question.

* The exceptions are going to be desperate sellers.

Yes, my intention is to only be making one mortgage payment at a time.

The neighborhood we want to move to (in 2-3 years) will make our commute go from 91 miles to 34 miles round trip. They also have a daycare/preschool in the neighborhood, and many amenities. Our monthly expenses would go down quite a bit by moving. So we are willing to get hosed a bit on the price of our current house just to sell it.

 

[Binarycow]

Sell your house, move your stuff into the garage of your relatives if they have room and are nice enough to let you do that, or rent a storage unit then go shop for a new house at your pleasure. It is a bad bad idea betting on being able selling your current house right away under this housing market condition. Besides paying two mortgages at once there's also the empty house sitting there begging to be looted/ broken in. Also you can't just switch off the utilities at the old house or anything like that if you don't want drastic change in temperature damage it.

 

[Jumpem]

Sell your house, move your stuff into the garage of your relatives if they have room and are nice enough to let you do that, or rent a storage unit then go shop for a new house at your pleasure. It is a bad bad idea betting on being able selling your current house right away under this housing market condition. Besides paying two mortgages at once there's also the empty house sitting there begging to be looted/ broken in. Also you can't just switch off the utilities at the old house or anything like that if you don't want drastic change in temperature damage it.

I wouldn't be able to afford two mortgages while having all of the expenses that come with having a pair of young children. So I would have to sell it first, or price it low so it sells quick.

 

[Binarycow]

I wouldn't be able to afford two mortgages while having all of the expenses that come with having a pair of young children. So I would have to sell it first, or price it low so it sells quick.

Good plan. Also, take the first offer unless it is a real low-ball one. My house was sitting for 9 months on the market before it was sold. I tell you that was a huge load off of our shoulders and this was before the melt down.

 

[iGas]

Subject to selling your own home condition is considered a weak offer and only work in a slower market or a house that have been on the market for a long period.

That type of condition would be okay if your offer price is high and selling your home at lower price to get it moving, because the seller do not want their house be locking up in a deal for long period and drive potential buyers away.

 

[piasabird]

The key is how much do you owe on your current house, and what the value of such a property would have if you sell it. i.e. equity. The problem is getting the equity out of the house.

Sometimes you have to do a few thousand dollars in home improvements to get a house to sell. You might watch some shows on HG channel. I love the ones where they just do a little improvement and then the house sells in a week or two.

 

[jiggahertz]

Does 20% down still apply ?

For no PMI you'll need 20%. Otherwise, some lenders will do a 10% down w/ PMI or you can do FHA with as little as 3.5% down.