How do one handle the in between living situation when selling and buying a house?

Discussion in 'After Hours Lounge (Off Topic)' started by DustinLC, Jul 22, 2003.

  1. DustinLC

    DustinLC Supporting Actor

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    I want to move to the south bay and sell my current house but how do one go about it? Do I buy a house first...if I do, how can I be approve of another mortgage and I can't afford two mortgages.

    If I sell the house first, where do I live before I can close on a new one?

    How did some of you handle it?
     
  2. Cary_H

    Cary_H Second Unit

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    The most common way is to arrange the occupancy date in the purchase agreement of your new home jive with the close of the sale of your current residence.
    Within reason, sellers are usually quite accommodating around the dates you need if they can make them work for themselves and are content with the remaining terms.
    Just like anything else in your initial offer, you go in asking for the dates you want and negotiate from there.
     
  3. Cary_H

    Cary_H Second Unit

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    I should have mentioned that you protect yourself from the two mortgage scenario by making your purchase offer subject to the sale of your current home. You have an out in the event you can't get your current home sold. The sellers protect themselves when agreeing to this subject by countering with a "subject" of their own that says you can be bumped in the event they get any "better looking" subsequent offers prior to you being able to come up with your end of the deal.
    For the most part, you'll be dealing from a far better position of strength when you have your current home on the market priced accurately to the current market conditions, and have financing in place for any additional monies to meet the purchase price.
     
  4. Glenn Overholt

    Glenn Overholt Producer

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    You should call up your mortgage company and ask. If your current place doesn't get sold for 3 or so months, and you get a new place, that might get a little messy.

    At first I thought you just meant your belongings. If you moved out now and get an apartment in the South Bay, you could put some of your stuff into a storage locker.

    Glenn
     
  5. Michael Warner

    Michael Warner Supporting Actor

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    If you sell your house first you can often add a clause whereby you rent it back from the new owners for a few months. That's what we've always done.

    If you buy a new house before your old one sells you can use a bridge loan to cover the costs until your old house sells. This often leads to a tense situation as you can't be 100% sure that your old home will sell in the allotted time.
     
  6. Philip Hamm

    Philip Hamm Lead Actor

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    My wife and I are planning on moving into a short-term apartment for a few months between our selling and closing times.
     
  7. Scott Merryfield

    Scott Merryfield Executive Producer

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    The answer usually depends on how the real estate market is in the areas you are selling and buying. All the answers given so far are possibilities depending on the situation.

    In our case the last time we sold/bought homes, our current home was in a high-demand area, so we bought our new home first knowing that we should not have any problems selling our current home. In fact, we sold our home in three days, receiving 5 offers on that 3rd day and getting above asking price. We then arranged for the closing dates on both sales on the same day, and paid rent for about 3 extra days to give us time to move our belongings.

    A co-worker, on the other hand, was moving from Windsor, Canada to Farmington Hills, Michigan. The complications of trying to sell in a less in-demand neighborhood, finding a new home and switching residences to a different country led him to rent an apartment for 6-12 months (with a clause in the lease to get out early if he purchases a house) while everything gets sorted out.
     
  8. Ryan Spaight

    Ryan Spaight Supporting Actor

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    A friend of mine is building a house, and sold his old one several months before the new one was ready. He scrambled around for a few days trying to find an apartment with little luck (the short-term rents were enormous, and he had pets). Then, just when he about to pay way too much, he found out the house directly behind his old one was available to rent, for less than any of the apartments he was looking at.

    We spent a weekend carrying stuff through the two backyards and driving furniture around the corner, and that was that.

    These things often manage to work themselves out, though it looks daunting at times.

    Ryan
     
  9. Jeff Ulmer

    Jeff Ulmer Producer

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    There are a few things you need to do.

    First, you need you a market appraisal of your current home by a few real estate agents. This should allow you to average out their estimates for a realistic selling price, plus find out how things are selling in your area. Get your house listed with a reputable agent.

    Next, you should talk to a mortgage broker to see how much finanacing you qualify for on a new home. This will be based on selling your current home, and will let you know the maximum you can spend on a new house.

    Third is finding a new house, preferably quite a bit less expensive than the maximum your bank says you can afford. This allows you some flexibility on your selling price (ie if you find a place you like and need to sell yours quickly to make the deal happen, you can drop your selling price to increase the chances of a quick sale), and doesn't get you into a bind down the road should interest rates take a major jump.

    As was said above, you make an offer on the new place subject to the sale of your home. In most cases, the seller will have the option of 72 hours notice to remove your remaining subjects if they get another acceptable offer before you have sold your house. I would also recommend adding a subject to financing clause, since you may need the bank to do an appraisal of the new home before your purchase. You wouldn't want to be stuck with your house sold, thereby obligating you to buy the new home, and then find out the bank won't lend you the money for it. A subject to building inspection is also a good idea, and for the couple of hundred dollars it will cost, could save you thousands if there are major problems in the new place.

    Once a deal is in place on either end, you need to coordinate the closing and possession dates as best as possible. You'll need to allow a few days for all the paperwork and title registration to go through, which your lawyer will handle. The timing on this stage is pretty critical, since you need your house sold to collect the funds for the next one. Typically, day one will be the sale of your house, day two the buying of the new one, and after that possession dates when you have to move out and you can move in - preferably the same day. It is complicated and can be a headache, but whatever deal gets done first should have it stated in the contract that the closing dates are subject to revision.
     

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