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Old 09-26-2007, 11:09 AM
 
1 posts, read 4,092 times
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My parents would like to downsize their house (valued around $600,000+). They want to buy a place for $350,000. They still owe around $275,000 on their current house.

My question is: How much do they have to put down in order to make an offer? There offer would have to be pending the sale of their current house otherwise, they don't have the $.

Thank you.
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Old 09-26-2007, 11:20 AM
 
Location: Just south of Denver since 1989
11,815 posts, read 34,276,866 times
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Sell the house first.

Earnest money should be from $500 to 3% of the contracted price ( a buyer's agent can tell you what is normal for your area) - the rest of the down payment depends on what they would qualify for and be looking for as far as a house payment - I would suggest no more than 20% down.
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Old 09-26-2007, 11:26 AM
 
582 posts, read 2,004,851 times
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My suggestion would be to get the house on the market and get a contract on it before you put earnest money down anywhere. We put money down on a townhouse that we loved right before we put our house on the market and it took so long our contingency period ended at the new place AND our mortgage rate would have increased to the point that we couldn't even afford it anymore.

In this market it could take awhile to sell and it's more upsetting to sit in a house that isn't selling right away when you know your new house is just waiting for you.
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Old 09-26-2007, 01:59 PM
 
Location: Wouldn't you like to know?
9,116 posts, read 17,648,168 times
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Sell the house first because most likely it won't be awhile before you can buy....
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Old 09-26-2007, 03:00 PM
 
Location: Gainesville, VA
566 posts, read 2,975,802 times
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Sell the house first. With that much equity, they should be able to price it ahead of the market and get rid of it pretty quickly.
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Old 09-26-2007, 03:01 PM
 
Location: Virginia Beach, VA
2,124 posts, read 8,815,406 times
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Quote:
Originally Posted by searchingforanswers View Post
My parents would like to downsize their house (valued around $600,000+). They want to buy a place for $350,000. They still owe around $275,000 on their current house.

My question is: How much do they have to put down in order to make an offer? There offer would have to be pending the sale of their current house otherwise, they don't have the $.

Thank you.
Searching are you asking this for tax implications? If they sold their current home for 600k and paid off the current loan amount of 275K, that would leave them a profit of 325K... If they have lived in the house 2 of the last 5 years, they would not owe capital gains and do not have to reinvest it. They would take the married couple up to 500k tax exemption on their property.

Now for the new property, they can put down whatever the loan terms are that work for them. If they want (or need) lower monthly payments, they will want to put more money down. If they can qualify for higher monthly payments and would prefer to keep their cash, they can.... if they qualify with the mortgage company.

*disclaimer* I am not an accountant or a tax preparer, nor do I play one on TV, please ask your accountant about any tax implications, etc......

Shelly
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