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Okay, I did a search and did not find a specific question addressing my question...I will be putting our house on the market in the next month or so. We will probably be wanting to build a new home in a new city.
1)Once I put the house on the market, do we then try to get approved for a new home loan or does the old house have to be sold first?
2)Once the house is on the market and we find a great floor plan for new house we like but our old house is not sold, what do we do then to keep the lot, etc? Is that when a "contingency" comes into play?
Thank you everyone, you have been a WEALTH of information!
That depends... are you in a financial position to pay two mortgages? If you are, then good for you, and a loan officer will be able to tell you whether you will be able to be approved for a loan without having to sell your current home. If you do have to sell your current home in order to buy or build, and if you are in a tough market, it's possible that a lender will give you a loan for the new home provided that you have leased out your current home. What are the market conditions where your current home is? What's the urgency to move? Are you being transferred or taking a new job? Those are all things to take into consideration. I would certainly recommend talking to a loan officer or two to help you to better determine what you need to do financially. I would also recommend talking with a local Realtor about current market conditions in your area. Ask lots of questions, and be sure to ask for details. Good luck!
1) Crunch the numbers first: net sale price of your home after expenses, lot purchase, utilities, building costs, permitting, time frames, etc.
In San Jose it can take 9 months just to get the permits issued, while you hold the option on the land. Once the permits are done you break ground the next day - then 3 months to build and there are always delays - do you have a contractor? an awesome agent that can do a development deal? A great lender that has affordable construction loans as well as take out loans? Do you have the cash to do all this and still have a 3-6 month cushion for delays or added expenses?
When I've done these deals the last thing we do is sell the current home - so my client has to be able to carry the construction costs while paying their current mortgage.
For you it sounds like you sell the house. Move. Find a place to live in the new community. Research where you want to build. Find the lender, agent, contractors in the new area. Option the lot. Get the permits to build what you want on that lot. Secure construction financing. Close on the lot and get your contractor knocking out the new place. Get permits finaled. Move into new house.
However my house is paid. I have no mortage. I am looking to buy a short sale or forclosed house or just one that is for sale. But I will be moving across the country.
I just need to know what the timeline will be like, What should I do 1st, 2nd, 3rd. I have never had a house to sell before. I just was able to pick up and move.
The only thing is for SS or forclosuers, my cash is in the house I have. They want proof of funds for cash offers and I wont have that till my house sells. How do you get around that or do I just have to rent and wait?
Selling times are different in all parts of the country and not too unuaual to take up to 12 months or so, all pending on you market and the price you set on yours. A good agent will be well worth the fees for handling as can give you a better understanding about the whole process. So lenders will allow you to count the rent and most purchases of short sales or foreclosures, will require the offer and approved loan to cover the purchase. They can take several months and what a lot of buyers are finding out, unless its new on the market, most of the flippers and investors have bought the ones they want. So good luck, and get some good professional help in each of these areas.
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