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Hello all. I need some advise with regards to selling my current home and purchasing a new home, mainly the issues of: is it better to buy the second home first, float two mortgages and then immediately sell the first home, or sell first, rent somewhere for a while, and then buy the new home?
I am in Miami, FL and the areas I am looking at are currently experiencing a buyers market per a few of the market analysis websites. I suspect selling my home would happen fairly quickly as there is a lot of demand in my area, but buying the second home however I am not certain of.
For some added background I'm currently looking at $60k in savings plus will have an added 20K to add to the down payment, however I am looking at homes in the 400K - 450K range and would need the profit from my current house (expected to be somewhere in the area of 35K - 42K) in order to have the full 20% down, and to cover closing costs. I have a 850 credit score and my wife a 799 and we both have solid job security.
I've heard of HELOC and bridge loans, but am wary of putting myself in a potentially disastrous situation financially (you never know).
I thought the process of purchasing our first home was pretty stressful, but that is starting to look like cake compared to selling a home and buying a home within a short time frame. Unfortunately we don't have any relatives whom we could go live with while we shop for our new home, so that is not an option.
Coordinating buying and selling is a lot more complicated and stressful than just buying. That said, people do it all the time and it ends up working out just fine.
In a buyers market, making an offer with a contingency to sell your existing house may not be a problem, but it will make your offer less attractive than one without that contingency. You may also get an offer on your house with the same requirement, which complicates things even further.
The simplest way is to sell your place first and then buy. The downside is it entails moving twice and paying rent. Check with a local realtor to get their advise and opinion on what would work bets for you.
Would like some advice on selling and buying within a short time frame
Okay... DON'T do it.
Quote:
is it better to buy the second home first, float two mortgages and then...
99% of the time... NO.
It's surely easier though (if you're loaded).
Sell what you have for the best price you can get.
Make buy decisions ONLY after you know what the net proceeds of the sale are. Expect to rent in between the two. Fairly long time if another city & job is involved.
We certainly have helped clients do this both ways.
We have done contingent offers and we have sold the first home before finding the new home.
Which is best for you depends on your life, stuff, and lifestyle.
We had one client with 14 horses. It was NOT possible for them to sell first and then camp in a hotel for a few months. They could not even think of putting their house on the market until they had found a new place, but they could not afford two mortgages. We coordinated both transactions and worked out the closing dates with enough overlap and rentback to allow them a smooth transition.
If you do this, I would recommend having one good agent (or a team, like hubby and me!) working with you on both the sale and the buy, so that they can carefully manage and negotiate the timelines. The contingent sale and its complicated timeline is probably the most complicated contract in our statewide forms library. Use someone who is a stickler for contract details!
Thank you for the replies everyone. This will be a move from our current townhouse in Miami to a SFH in Miami (just different zip code). It's starting to look like we will go the sell first route, rent for a while, and search for our perfect SFH.
Despite the ability to do a HELOC or bridge loan we've come to accept that it would be better to be done with one thing (selling the home) before taking on the other (buying). Hopefully the realtor we choose can recommend some short term rentals or we'll have to look online/ask around.
The prospect of moving twice is not a fun one, but I'll take hauling boxes around over putting myself in financial jeopardy.
Hello all. I need some advise with regards to selling my current home and purchasing a new home, mainly the issues of: is it better to buy the second home first, float two mortgages and then immediately sell the first home, or sell first, rent somewhere for a while, and then buy the new home?
I am in Miami, FL and the areas I am looking at are currently experiencing a buyers market per a few of the market analysis websites. I suspect selling my home would happen fairly quickly as there is a lot of demand in my area, but buying the second home however I am not certain of.
For some added background I'm currently looking at $60k in savings plus will have an added 20K to add to the down payment, however I am looking at homes in the 400K - 450K range and would need the profit from my current house (expected to be somewhere in the area of 35K - 42K) in order to have the full 20% down, and to cover closing costs. I have a 850 credit score and my wife a 799 and we both have solid job security.
I've heard of HELOC and bridge loans, but am wary of putting myself in a potentially disastrous situation financially (you never know).
I thought the process of purchasing our first home was pretty stressful, but that is starting to look like cake compared to selling a home and buying a home within a short time frame. Unfortunately we don't have any relatives whom we could go live with while we shop for our new home, so that is not an option.
Any advice would be appreciated.
Provided you qualify with both house payments, buy the new house with an 80% First mortgage and a 10-15% Second mortgage with no Prepayment Penalty, then pay off the Second when you sell your current place.
Depends on the market in your area. In a sellers market, you'd be SOL since you need to sell your old place first. But if you're in a buyers market, use your old house as a contingent for the new one with a clause as long as it sells, you're good, and spend the time to make sure you fix up the house to put in showing condition, make sure to check with things like your HOA for selling, etc. Also, make sure to get pre-qualified first.
Hello all. I need some advise with regards to selling my current home and purchasing a new home, mainly the issues of: is it better to buy the second home first, float two mortgages and then immediately sell the first home, or sell first, rent somewhere for a while, and then buy the new home?
I am in Miami, FL and the areas I am looking at are currently experiencing a buyers market per a few of the market analysis websites. I suspect selling my home would happen fairly quickly as there is a lot of demand in my area, but buying the second home however I am not certain of.
For some added background I'm currently looking at $60k in savings plus will have an added 20K to add to the down payment, however I am looking at homes in the 400K - 450K range and would need the profit from my current house (expected to be somewhere in the area of 35K - 42K) in order to have the full 20% down, and to cover closing costs. I have a 850 credit score and my wife a 799 and we both have solid job security.
I've heard of HELOC and bridge loans, but am wary of putting myself in a potentially disastrous situation financially (you never know).
I thought the process of purchasing our first home was pretty stressful, but that is starting to look like cake compared to selling a home and buying a home within a short time frame. Unfortunately we don't have any relatives whom we could go live with while we shop for our new home, so that is not an option.
Any advice would be appreciated.
IF you can carry two for a month or two in a hot market, I am a firm believer in "Buy. Move. Sell."
Recognize that after closing on your new house, you will not make a payment until the 1st of the following month. I.e., close on April 22. 1st payment is due on June 1.
If your current home is in a vigorous market, you might even close with only one "double payment" month.
You can have your home on the market while waiting to close on the new house, or you can sell it vacant. I like vacant. Easy for buyers agents to show. Easy for sellers to allow appointments on moment's notice. ZERO clutter.
Talk to lenders.
IF you can swing it for your purchase, take the second mortgage to get your LTV on the 1st to 80%.
The second will be a bit pricier. Pay it off when you sell your current home.
Will you be ruined if you cannot sell within a few months? Then you cannot swing it.
If you just feel stressed because you have two houses? "Buy. Move. Sell."
Imagine:
You take a contract on your primary and go shopping, and have earnest money in the new house. And, inspections, appraisal, etc.
And your buyer fumbles, loses job, gets hit by a bus, the day before closing and you cannot buy your new house with the loan plan you applied for.
And, your new house seller is using the money to buy their next house.
And everyone is mad. And someone is talking about suing someone.
THAT is real stress.
IF IF IF you can swing it reasonably, "Buy. Move. Sell."
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