Home Purchases: How Did You Time Sale of Your Home & Purchase of New One?

[Fern]

For those of you who have had the experience of selling your home, how did you time the sale of your house with the purchase of a new one?

I know the conventional thing to do is first get a buyer for your home, and then start looking for a new one, but if you are somewhat particular about where you live, what do you do if you're afraid you might not be able to find something you really like within the 1 or 2 month window typical in a buyer's contract?

I'm also not crazy about carrying 2 mortgages for several months. Seems kind of risky, especially in this sort of slowed down real estate market.

I thought maybe you could make an offer once you find something you like, with a contingency clause that says the offer is contingent upon your being able to sell your own house, but people have said to me that wouldn't appeal to sellers since it's really very iffy and not a firm offer.

[mom-from-missouri]

My first time, I got lucky. I found one, used the same realitor to list mine, and he sold mine before he even got the sign in the yard!! My friend has a contract on one with a clause that hers sells in 35 days. Mine is for sale now, but buying another isnt an issue, as I am getting married and moving to his place. Just wish mine would sell, as we are planning on it selling so we can get married...

[jodi]

Actually, around here, sellers often write their contracts to buy a house contingent on selling theirs. It's called a "recall" clause - basically a seller of a house will accept an offer with a recall clause that means they agree to accept the buyer's offer and will wait a resonable amount of time for the buyer to sell their current home (usually 30 days, but I have seen longer)...BUT if they get another offer on the property, the buyer then has 48 hours (or whatever you agree on) to remove the recall clause (in essence, agree that they will buy the property even though theirs has not yet sold) or they will lose the sale to the second offer. This happens quite a bit if the buyers cannot afford to carry two mortgages at once - they may lose the house they want if they can't sell theirs fast enough. I have also worked with buyers who could carry two mortgages, but did not want to - they will write in a recall clause to buy a little bit of time to sell their house, but know that they can remove it if they have to (to avoid losing the home). I'm sorry if this does not make sense, but it is hard to explain in e-mail! Definitely get a good real estate attorney! I tell all my clients that their fees are well worth the money (about $350-400 around here - central NY).
A downside: an offer that is contingent on selling a home will nearly always lose out to a comparable offer without a contingency. It definitely weakens the buyers bargaining power. I guess a lot depends on the market in your area too.
I have had clients who received a full-price offer on their home, but only if they closed by a certain date because the buyers were just moving to the area and needed to have a house. They took the offer and rented an apartment for three months until they found a home of their own. Definitely a hassle, but do-able if the price is right!

[Fern]

Jodi, that was very helpful. I had assumed i could do the recall clause, but i also realize, as you said, that an offer with a recall clause is definitely weaker than one without.

I could carry 2 mortgages for a few months i guess but definitely would rather not! So hard to predict how one's house will sell!

You're a realtor, right? Do you accept clients for less than 6% these days?

[homeCooking]

The best thing to do is to sell your house first. Then when you have the cash you really know what you can afford. After selling move into temporary housing month-to -month and put all your things in storage. Take your time to find the right house and when you do your offer will be very attractive because you have the money already. An offer with contigencies doesn't make you a good buyer, but if you have the down payment already you will be able to negotiate with the seller. You also don't want to be under time pressure to buy your house and make the wrong decision.

Another thing is that the real state market is about to crash so now is the time to sell( sell high and buy low) and wait at least a year to buy anything. You will save a lot of money.

good luck

[Ima saver]

I wound up living in a travel tailer twice when I sold my home. My husband built us a new house, but he had other houses going, so it took a while.
We sold to a lady that had not sold her house in florida yet. She went to the bank and got something called a bridge loan. It cost her a little money but she was able to move directly out of her old home and into a new home without finding a rental.

[Keen]

"Another thing is that the real state market is about to crash so now is the time to sell( sell high and buy low) and wait at least a year to buy anything. You will save a lot of money."

Good to know...I guess i can stop wondering now.

[Ima saver]

I hope you are wrong. We just turned down two couples that wanted us to build a house. One man can only do so much!

[thriftymom]

Originally Posted by homeCooking

Another thing is that the real state market is about to crash so now is the time to sell( sell high and buy low) and wait at least a year to buy anything. You will save a lot of money.

good luck

I'm just curious since I'm planning to move soon- How do you know that the real estate market is going to crash? And, doesn't it make a difference depending on where you live?

[Fern]

I don't think a "crash" is a given. It's looking more and more like a "soft landing." In other words, it's somewhere in between being a seller's market and a buyers market.
and of course there can be mitigating circumstances, like if you have a small house in a neighborhood of big homes, it should sell fast regardless.

[homeCooking]

Well I thought it would be a soft landing but at this point I think what's coming it going to be worse than that. I've been watching the market for years and I'd never seen inventory being so high and so many price reduction. Of course it depends where you live, Newsweek is predicting 10% average reduction in the US during the next year and 20-30% in the areas where the housing bubble got the worse( San Fran, Boston , Los angeles and Florida).

We all knew it could last forever anyway. There was a housing bubble of prices increasing 20% every year and income doesn't increase along with it. Now that the interest rates are increasing less people can afford a mortage and let's don't even mention about the people who bought with adjustable rates. They may not be able to make the payments next year.

I saw coming because it was getting out of control...

[debtfreeme]

I am starting to look here in to find the area i want to purchase and i keep seeing the same house on the market for months now. Some for 6 months with several reductions. Just wish they would come down to about 200k snap one up.

[Ima saver]

Thins are booming here. Thing is, my dh and I do not try to make a killing. We want to move the house and if we don't make much profit, so be it. My cash money is tied up in these spec houses. I have seen people raise the price on the house and sit on it. The one across from one we built is sitting now for 14 months. It is poorly built and a terrible house plan. You have to go upstairs to take a shower. So they raised the price.

[homeCooking]

Hi Ima
if you price your houses correctly you won't have any trouble finding a buyer. My BF bought an ugly old house for
$959,000 dollars last summer. Now the neighbors are selling theirs ( which has 2 more bedrooms) for $875,000 after several price reductions. And so far they don't have an offer. I wonder how it feels to lose 75k in 9 months....

[mom-from-missouri]

I know mine is price right, but I think I will have trouble. The airbase here recently did a cutback. In this town of around 20,000 we have over 2000 houses for sale right now. It is a college town, and they also just built a few new dorms and married housing units. Right now the trend here is to rent, rather than buy. I may end up renting it out. But, I would rather sell it, and we could use the cash to pay of my almost hubbys farm after the wedding. Then, his house payment money would go to savings and investments and adding more cattle to the operation.

[Fern]

Originally Posted by homeCooking

Well I thought it would be a soft landing but at this point I think what's coming it going to be worse than that. I've been watching the market for years and I'd never seen inventory being so high and so many price reduction. Of course it depends where you live, Newsweek is predicting 10% average reduction in the US during the next year and 20-30% in the areas where the housing bubble got the worse( San Fran, Boston , Los angeles and Florida).

...

They're predicting a 10% increase in CT for 2006.

[thriftymom]

That sounds more like what I had heard for Massachusetts. I heard that the property values will continue to increase but at a much slower rate.

[Snoopy2645]

If I ever move I will move to an apt between saling & buying for money reasons. The first time I moved was from my trailer to this house & my trailer was not saleing it scared me to death I had 2 house payments BTW I was a single mom too at the time so it got really tight tell I sold my trailer at a way lower price just to get it gone. WIll never be in that situation again at least I hope not

[shelbylovesmelby]

This is a good thread it has my curiosity. Since my dh is interviewing for a job 45 min away, if we'd consider moving how would we all go about it. Can't afford 2 mortgages, but with predictions of gas prices hitting $3 again this summer is making me consider it. But we have good neighbors & I don't know that we would even see our house sell for the appraised value anyway. SO we may be sticking it out here til we win the lottery or ???

[homeCooking]

Originally Posted by Fern

They're predicting a 10% increase in CT for 2006.

As long as you didn't hear that from the RE association or a mortage company....