Buying a new home - Need advice on how to handle old property and buying/selling. (contingencies, recommendation)
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Some of you may recognize me from a post I made recently about noisy neighbors. Well, I've decided to move! I was hoping for some input on how to manage the sale of my old property and get into a new one as soon as possible.
Here's where I currently stand:
I'm located in Connecticut and am looking for a single family home in the central part of the state. I don't really want to spend over 150k.
I live in a condo and it's paid in full. I purchased it in 2013 for 50k and put about 10k in renovations (flooring, paint, etc.) as well as a new stove (2013), water heater (2016) and furnace (2016).
I gross 55k a year, depending on bonus. I only have about 5k cash that's readily available.
I have near perfect credit so as long as the market isn't making interest rates artificially high, I should be OK there.
I gave a "showing" of the noise I hear on a regular basis to my mother, just because I was venting. She offered to loan me a sizable amount to facilitate and expedite the moving process. She also offered that I can stay at her house any time I want or move back in temporarily if needbe. So I'd have somewhere to stay for any transitional period. I really don't want to borrow the money, but it's an option as a last resort. Very thankful for my supportive family
Now, I'm trying to figure out the best way to handle this so I can move as soon as I find a place that's viable. 5k obviously isn't enough for a down payment on a 150k property. So, unless I borrow from my mother, I will probably need to sell my condo first and use that cash to put into the new home.
How does this normally work - Do I reach out to a real estate broker to sell my condo, and when it sells, just move back in with my mother until I find a house? Is there a better way to manage the sale of the old and buying of the new property? Any other general recommendations or concerns that I might have missed?
It all starts with a fix on exactly what you can do, lending programs available, and your qualifications for them.
So, first, talk to a few lenders about your borrowing prospects.
Don't borrow from Mom without discussing options with a lender. A personal loan that has to be repaid will complicate things.
If you can move back with Mom, and hack that personally for a while, I might do that while selling, and bank the condo money before trying to buy.
That will mean you don't have to write an offer Contingent on Selling the condo. Those are always weaker offers.
But again, interview lenders as to your options and pick one to work with so you can form a solid plan.
I live in a condo and it's paid in full.
I purchased it in 2013 for 50k and put about 10k in renovations
(flooring, paint, etc.) as well as a new stove (2013), water heater (2016) and furnace (2016).
None of these things are "renovations". They're all very basic homeowner upkeep items.
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Regardless... your BEST course of action is to SELL the condo apt. Get the best price you can.
Once you have a contract in hand and KNOW what net cash proceeds you can expect...
then you start looking for the best purchase (or rental) choice you can make.
As stated above the best relocation choice might be a share situation too (even Mom).
btw this applies to 99% of the world.
Nothing special about it.
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What you DON'T want to do is find a home somewhere else first and then try to
force all the numbers and logistics to work out for your timeline and budget.
if you're going to use a loan at all to purchase the next place, then as Mike noted - start with a lender. Based on what you've said, you're probably just fine, so getting the comfort of a "Yes, you can do that" should be easy and quick.
Also, have you looked online to see what $150K will get you in the location you want to live? There'd be no reason to sell, move in with mom, and then find out "Crap, there aren't any decent $150K houses".
Logistically, you could certainly start looking in earnest once your condo was under contract. Still, as noted, the strongest offer you can make is one without contingencies, which means you'd have to finish the condo sale before making any offers. In your case, you have the benefit of a place to stay.
Thanks guys. I check first with a lender to see what they'll offer me.
Quote:
Originally Posted by BoBromhal
if you're going to use a loan at all to purchase the next place, then as Mike noted - start with a lender. Based on what you've said, you're probably just fine, so getting the comfort of a "Yes, you can do that" should be easy and quick.
Also, have you looked online to see what $150K will get you in the location you want to live? There'd be no reason to sell, move in with mom, and then find out "Crap, there aren't any decent $150K houses".
Logistically, you could certainly start looking in earnest once your condo was under contract. Still, as noted, the strongest offer you can make is one without contingencies, which means you'd have to finish the condo sale before making any offers. In your case, you have the benefit of a place to stay.
For 150k i could get a smaller house (~1,000 sqft) in a somewhat decent area. My condo is 788 sqft, so either way I'd have more living space. I'm single, so it would just be me living there right now. I could probably spend a bit more than 150k, but I'm not sure if it's too risky on a 55k a year salary.
To give you an idea of the types of homes I was looking at:
well, now you've confused me at least. if you sell your condo, you will pay cash for the house, or you'll need to have a mortgage? How much? What are the property taxes in that area?
based on a cursory calculation, you can afford a $150K, 15 year mortgage. But it doesn't sound like you need anywhere near that amount.
Only a CT resident or a Realtor local to your area can tell you whether those are "somewhat decent" areas. Have you scouted them out yet?
Thanks guys. I check first with a lender to see what they'll offer me.
For 150k i could get a smaller house (~1,000 sqft) in a somewhat decent area. My condo is 788 sqft, so either way I'd have more living space. I'm single, so it would just be me living there right now. I could probably spend a bit more than 150k, but I'm not sure if it's too risky on a 55k a year salary.
To give you an idea of the types of homes I was looking at:
Generally those towns are good options for homes in your price range. I can't however speak for the exact locations within those towns since like any town, they have more and less desirable parts to live in. You could post on the Connecticut forum to ask about specific neighborhoods to consider. Generally it is best to buy a home in the best location you can afford.
I agree that you should talk to a lender first to get an idea of how much of a mortgage you can qualify for. I also suggest you check to see what units are for sale in your complex and what they sold for recently. Be sure to price your unit reasonably. Do not be jaded by your personal attachment to the property. A unit that is priced too high will just sit on the market. Buyers today are much more savvy of the home buying process and they will take advantage of any unit that has sat on the market for a long time.
Also be prepared to get lowball offers when you do put it on the market even if it is reasonably priced. Thanks to shows like HGTV's House Hunters, buyers are well aware that they could get a bargain by offering significantly less than the asking price. Be realistic on what you expect to get for the place, again by looking at what recent units have sold for. And do not be insulted by low offers or be shy to counter with a price close to or at your asking price. This is really a game in which you want the most for your property while they want to pay the least. Good luck, Jay
Thanks Jay for the advice! I will make a post in the CT forum to see what people's thoughts are on the neighborhoods in my price range.
Quote:
Originally Posted by BoBromhal
well, now you've confused me at least. if you sell your condo, you will pay cash for the house, or you'll need to have a mortgage? How much? What are the property taxes in that area?
based on a cursory calculation, you can afford a $150K, 15 year mortgage. But it doesn't sound like you need anywhere near that amount.
Only a CT resident or a Realtor local to your area can tell you whether those are "somewhat decent" areas. Have you scouted them out yet?
It's basically that id have to sell my condo for what I can (between 50-70k). This would go into the 150K or so for the new house. So I'd have to take out a mortgage close to 100k and that's ultimately what I'd have to be able to afford.
I've reached out to a few realtors but haven't heard back yet. What you've mentioned are some good questions for me to ask so I will put them on my list
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