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First, a quick intro about myself. I usually am on the conservative side & plan all the potential avenues a few years ahead. Got married & sold my apartment in manhattan in 2002 for a decent gain. Moved back in with my parents for about 8 months until I found our current home in LI. Currently we have one child and things are rather good as our income/career has been moving along as well.
I am open to potentially about selling & moving to another home on LI in the next few years. The question is, how do most people do it? I see a few possible ways most people do this. Of course, all the different methods have their tradeoffs. Is there a more common way than another?
Just go shop for another house and buy it. Until the new house closes, then sell your old house. I believe some people apply for what they call a bridge loan to hold two properties. The proceeds of your old home will pay off the bridge loan.
-The mystery is that sometimes it can take many months to sell your old home. There is also a real cost of a bridge loan (higher rate than conventional loan).
-I would presume I have to find a real way to get a down payment of the new house while most of my equity is locked down in the old house. With the prices of homes these days, this can be a rather sizable sum.
-Stress of juggling of buying & selling all at once.
Purchase a house with a stipulation with the seller of the new house that you must sell your house first in order to proceed. I would presume many sellers will balk at this idea. I would guess sellers just want their money and not drag this for ongoing months. This puts pressure on me to find a buyer fast for my home while trying to buy the new house. In a sellers market, my buying power would be less because it’s an unattractive request.
Similar to what I did in 2002. Sell current house first and rent until I find a new home. It’s great to get the equity out of the current home & find another home at your leisure. There is risk of change in the real estate market in the interim. There is the stress of moving twice. The difference is that we have one child now & that can give us added headaches.
Have boatloads of cash to hold two homes. Meaning having to pay two of everything until your old house sells. It would be safe to say that most people don’t have this option which includes me.
People out there buy & sell all the time for various reasons. So I am curious, what is the best course of action? Any insights would be appreciated.
KB is right - sell you house first - don't get creative and gamble on maybe having everything coincidentally time out correctly - chances are that will not happen.
You don't want to get caught owning two homes.
And unless you want to be tempted unnecessarily, I'd stay away from house hunting until you have a signed offer with a down payment in hand.
I'm in the same boat as you, and I'd much rather sell first than double up , kind of risky in this market unless you really price it to move. I would disagree though with the one post and definitely look at houses on the market without being in contract. You want to be able to know whats out there and what you can get for the money in advance so when you do go to contract, you are ready to make your decisions on buying, instead of only then starting the looking process.
It's not the day to take chances. I have heard of contracts falling apart and the sale going dead right at the closing table. Pretty scary.
We are in our second home. We sold first, moved into a rental until we found what we wanted. I am not saying this was easy on us, it wasn't. My kids were very young and cried that they wanted to "go home" It was heart wrenching to say the least... the up side when we found this house, we had nothing to sell and the sellers were so happy . There was no stress..just waiting for closing. As hard as it was to leave our home first, it was the best way to go in the end. good luck to you!
Definately hire an attorney specializing in real estate to oversee your best interests in both transactions. There's no better representation on the island than that of our friends at Dewey, Cheatham and Howe. Tell them you heard about them on CD and get 10% off your first purchase!
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Definately hire an attorney specializing in real estate to oversee your best interests in both transactions. There's no better representation on the island than that of our friends at Dewey, Cheatham and Howe. Tell them you heard about them on CD and get 10% off your first purchase!
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The best way is - and always has been - to sell first and then buy.
Yes, it does create a certain amount of pressure for the search, but in today's market there is plenty of inventory. And at the same time, it gives you an advantage/more credibility in your negotiations when you can tell the seller that you have nothing to sell, or that your house is already in contract and you're prepared to go ahead asap.
With regard to sellers--especially in this market, neither they nor their attorneys will agree to a "subject to the sale" of your current residence because - as a previous post stated - contracts have been known to fall apart and they'd be stuck for who knows how long. More contracts are falling apart than ever before! (That's a whole other thread )
With regard to bridge loans, they pretty much have gone the way of 100% financing - available money isn't what it used to be, and besides, there is the issue of paying for two closings...
Should you decide to go for it anyway, I'd like to suggest you talk to a lender first, to find out if you can get another mortgage while owning your current house. Mortgages are getting a lot harder to get - the lenders are double crossing their t's and dotting their i's, they want reserves, etc., etc...
BTW, in the event you're not sure about the location to move to, while your home is on the market, you could use the time to narrow down your new location...
You asked and I hope I provided a few things for you to think about
The best way is - and always has been - to sell first and then buy.
I wouldn't say "always", it depends on the person's situation.
Maybe in other places where rentals are easy to find and affordable, but that's not so on Long Island. If you've got a kid or two, esp if different genders, you'll need at least 2 bedrooms and where can you find that in a good area for less than 2K/mo plus utilities?
Add to that the expense of moving twice and storing any stuff that won't fit into the rental, and the emotional stress of living in close quarters in a place you or family members really don't want to be and never knowing when you'll find what you want to buy. People can end up compromising just to get out of the blasted rental and buying something they really don't want or maybe even can't really afford.
I've been looking for something very specific in one specific area for 2 1/2 years and until I find what I want, close on it, and get it 100% ready to move into, I'm not going to put my current house on the market.
I wouldn't say "always", it depends on the person's situation.
Maybe in other places where rentals are easy to find and affordable, but that's not so on Long Island. If you've got a kid or two, esp if different genders, you'll need at least 2 bedrooms and where can you find that in a good area for less than 2K/mo plus utilities?
Add to that the expense of moving twice and storing any stuff that won't fit into the rental.
I've been looking for something very specific in one specific area for 2 1/2 years and until I find what I want, close on it, and get it ready to move into I'm not going to put my current house on the market.
I certainly appreciate your situation with regard to your needs and recognize the importance to you. Fortunately for you, it sounds as though you could be in a position to carry two homes (as long as the lenders agree), in which case it's more a matter of cost than inconvenience.
Looking for 2 1/2 years definitely sounds as though you are being "highly selective"... I would think there are few areas on Long Island where it should take that long.
Good luck in your search - it sounds as though you're willing to wait however long it takes
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when we found this house, we had nothing to sell and the sellers were so happy . There was no stress..just waiting for closing. As hard as it was to leave our home first, it was the best way to go in the end. good luck to you!
