In a perfect world, you sell your old home and buy the new one on the same day. Given that things rarely turn out perfectly, here are some of the things we will do to help you negotiate the sale of one house with the purchase of another.
(If you have interested buyers, but their house must be sold first, we can help - we may even be able to use our Guaranteed Sale Plan with your buyer.
Time it right
Fall and spring are the best times for homes to move and you want to consider the season of the year when buying and selling. In the South, any season works. And if the closing dates aren’t going to coincide, a gap – rather than two mortgages – is the better. It’s easier and usually cheaper to find temporary housing than juggle two mortgages.
Selling First
- Selling your home before buying a new one minimizes financial hazards. Even if you have to find temporary housing, it’s generally cheaper than two mortgages.
- Get an appraisal in the beginning of the sales process. That way you’ll have a good idea how the sale of your home will effect your purchasing power on the new one. This will help keep you from over extending your mortgage abilities.
- Get pre-approved on a loan for the new home.
- Until most of your contingencies have been met, wait to put an offer on a new house. You don’t want to be left holding the bag, or in this case, the house.
- If you’re ready to accept an offer on your house, but haven’t found your new home, WE WILL NEGOTIATE YOUR STAYING IN YOUR HOUSE AFTER CLOSING. This will give you more time to look for your new home.
Buying First
- It happens. You’re only thinking of buying, and suddenly the right home shows up. Now you have to sell your old home quickly. Here are some tips on making things work in your favor:
- We can negotiate an extended closing date. You can also make the purchase contingent on your house selling. This will work better in a slow market, but it’s worth a try in any market. You never know what may also work best for the seller of your new home.
- Try and schedule the closing date of your current house prior to the closing on your new home. Again, we can negotiate your staying in your house until the closing date of your new home. Or if necessary, temporary housing is generally a better situation than two mortgages.
- Take a close look at what price you’re going to ask for your house. Make sure it’s realistic in the current market.
- When an acceptable offer is received, we will use our Exclusive Pre-Qualification Addendum (which immediately eliminates unqualified buyers). You don’t want any surprises that are going to delay things.
- Bridge Loans
Excerps from a Florida REALTOR article:
CLEVELAND, Ohio – June 5, 2017 – The bridge loan is back. While the details of a bridge loan vary by lender, they allow a homeowner to buy a new home before selling their current home.
Under a new version announced by Third Federal, for example, an owner's existing home payment is eliminated during the process.
"The new mortgage product, a bridge loan, is designed to be a link, or bridge, between selling a borrower's current home and purchasing their next home," Third Federal said in a statement announcing the new bridge loan. "Under the terms of the Third Federal Bridge Loan, a borrower's existing home payment is eliminated so they only have one payment while they sell their current home."
"With many markets facing low housing inventory, borrowers who are interested in buying a home need to act fast to have their bid accepted," says Marc A. Stefanski, Third Federal's chairman and CEO. "By using our bridge loan, borrowers who already own a home can eliminate a barrier to buying their next home and better compete in low inventory markets."
The product is available in states where Third Federal offers mortgage purchase loans, including: Ohio, Florida, North Carolina, Pennsylvania, Maryland, New Jersey and Virginia. Effective today, Third Federal is also offering purchase loans and the new bridge loan in Kentucky, Illinois, Indiana, Georgia, Missouri, and Tennessee.
Details on Third Federal Bridge loans
- Borrowers can use the equity in their current home for the downpayment on their new home
- No principal or interest payments on the bridge loan are required for up to 12 months while the current home is being sold
- There are no application fees, cancellation fees or prepayment penalties
- The bridge loan is available for single-family homes, planned unit developments and condominiums that are primary residences.
Same Market or Across Country
- Generally, if you’re buying and selling in the same market, you can negotiate closing dates to work for you. But when you’re dealing with a cross country move, it’s a lot harder. We work with you and/or the relocation agent . Legal documents can be faxed or sent via overnight courier and your focus won’t be stretched to the limit.
Show Me the Money
Make sure you have a tight hold on, and a clear understanding of, your financial situation. Cash reserves are always helpful, but never more so than during the purchase of a home. Three to six months is the recommended reserve. If you’re a smart shopper/seller, you’ll accept an offer from someone who’s flexible about move-in dates. It can save you money in the long run. Too many moves with storage costs can quickly eat up any profit you may have made in the transaction.
