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Started By
Message
Couple of questions re: Selling and buying a new home
Posted on 8/12/14 at 12:09 pm
Posted on 8/12/14 at 12:09 pm
I have my current home up for sale and upon selling we'll be looking to buy a new house. I'm completely new to this process, so I had a couple of questions...
1. I couldn't find much, anyone know if interest rates are expected to rise soon, or any speculation on this matter? I ask because my realtor wants to lower the price of my home more than I planned for because he wants to sell quickly to get a new house and lock in the current interest rate before they go up, according to him. This does seem like a plausible theory, but I ask because I've grown to not be very comfortable with his dealings, but we're stuck in a 4 month contract with a termination fee(that was a rookie mistake, I know)
2. Not sure how to word the question/statement, but mainly how in the world do you time something like this in terms of once I sell my house and get a closing date, I'd have to quickly find a new house and hope to close before that date...I guess i'm looking for advice on how that process works, if that makes sense. I think the wife and I could decide on our next home fairly quickly, but still don't know or think that would guarantee a closing on the new house before the old house closes, right?
1. I couldn't find much, anyone know if interest rates are expected to rise soon, or any speculation on this matter? I ask because my realtor wants to lower the price of my home more than I planned for because he wants to sell quickly to get a new house and lock in the current interest rate before they go up, according to him. This does seem like a plausible theory, but I ask because I've grown to not be very comfortable with his dealings, but we're stuck in a 4 month contract with a termination fee(that was a rookie mistake, I know)
2. Not sure how to word the question/statement, but mainly how in the world do you time something like this in terms of once I sell my house and get a closing date, I'd have to quickly find a new house and hope to close before that date...I guess i'm looking for advice on how that process works, if that makes sense. I think the wife and I could decide on our next home fairly quickly, but still don't know or think that would guarantee a closing on the new house before the old house closes, right?
This post was edited on 8/12/14 at 12:10 pm
5
Posted on 8/12/14 at 12:13 pm to shel311
quote:
2. Not sure how to word the question/statement, but mainly how in the world do you time something like this in terms of once I sell my house and get a closing date, I'd have to quickly find a new house and hope to close before that date...I guess i'm looking for advice on how that process works, if that makes sense. I think the wife and I could decide on our next home fairly quickly, but still don't know or think that would guarantee a closing on the new house before the old house closes, right?
Start looking for a new house for y'all now. When you find one you like put in an offer that is contingent upon the sale of your current home. From what I've heard is if y'all are in the same city you can coordinate to use the same title attorney and everyone is at one closing.
Posted on 8/12/14 at 12:20 pm to shel311
Question #1 - How long has your house been on the market? What kind of advice did the realtor give you when setting the original asking price? Had any interest from potential buyers? I have no idea about interest rates, but generally don't trust real estate agents and it sounds like he wants to sell quick to benefit himself and not you. Unless your house has been on the market longer than comps in your area.
Question #2 - You need to be on the lookout for the house you want to buy. If you find one you have to have, put an offer on it with a contingency on selling your home in X days. Then it's up to the seller on whether the accept, and at that time consider lowering the price. Or when you get an offer, you can try to set the closing for 20-30 days to give you time to find another home. Were it me, I'd be on the hunt now for the new home I wanted to purchase.
Question #2 - You need to be on the lookout for the house you want to buy. If you find one you have to have, put an offer on it with a contingency on selling your home in X days. Then it's up to the seller on whether the accept, and at that time consider lowering the price. Or when you get an offer, you can try to set the closing for 20-30 days to give you time to find another home. Were it me, I'd be on the hunt now for the new home I wanted to purchase.
Posted on 8/12/14 at 12:21 pm to Golfer
quote:we won't be moving far away, but 99% chance it'll be a different city than where we currently live. But nonetheless, I was unaware we could do that with putting in an offer contingent upon selling our current home, so that's good to know.
Start looking for a new house for y'all now. When you find one you like put in an offer that is contingent upon the sale of your current home. From what I've heard is if y'all are in the same city you can coordinate to use the same title attorney and everyone is at one closing.
Thanks
Posted on 8/12/14 at 12:24 pm to The Spleen
quote:1 month
How long has your house been on the market?
quote:He said he felt that it was a competitive price but we could sell for that amount. Even know in wanting to lower the price, he said 4 comps just sold for comparable prices so "he's not sure" why our house isn't getting as much interest as he thought it would, which is unsettling to hear he has no clue here.
What kind of advice did the realtor give you when setting the original asking price?
quote:Not much, no. The 1st couple of weeks we hardly had any showings. Recently in the last couple, we've had a few more. 1 couple came look at it twice only to say they thought it should be priced about $40K lower than it is so they didn't even bother to make an offer, which I thought was odd.
any interest from potential buyers?
quote:That's 1 of my worries.
but generally don't trust real estate agents and it sounds like he wants to sell quick to benefit himself and not you.
quote:Thanks. We've been looking but just in a holding pattern, but it looks like we should really get out there at this point.
Question #2 - You need to be on the lookout for the house you want to buy. If you find one you have to have, put an offer on it with a contingency on selling your home in X days. Then it's up to the seller on whether the accept, and at that time consider lowering the price. Or when you get an offer, you can try to set the closing for 20-30 days to give you time to find another home. Were it me, I'd be on the hunt now for the new home I wanted to purchase.
Posted on 8/12/14 at 12:25 pm to shel311
Interest rates seem to be dealing with competing forces right now. Parts of the economy seem to be improving, but wage growth isn't. People are still having issues getting qualified for mortgages. I honestly don't see anything that would cause interest rates to rise significantly before QE ends later this year, and probably, we may go into 2015 before any meaningful rate rises.
However, if you sell your home quicker, he gets paid quicker, and if you buy a new home quicker, he gets paid quicker.
Freakonomics has a chapter about this. Basically, if you reduce your selling price by 10K, since he gets 3 percent, he only loses $300. He may rather take $300 less today, then wait a few more months to sell.
His incentive is to get paid today, not potentially a few more bucks tomorrow. That's why he is telling you to sell now.
Sounds like you all are in no rush to sell your house - it's not like you are holding two houses. He is a professional, and I would take his advice under consideration, but if you are in no hurry to sell, I'd stick to my own timeline.
However, if you sell your home quicker, he gets paid quicker, and if you buy a new home quicker, he gets paid quicker.
Freakonomics has a chapter about this. Basically, if you reduce your selling price by 10K, since he gets 3 percent, he only loses $300. He may rather take $300 less today, then wait a few more months to sell.
His incentive is to get paid today, not potentially a few more bucks tomorrow. That's why he is telling you to sell now.
Sounds like you all are in no rush to sell your house - it's not like you are holding two houses. He is a professional, and I would take his advice under consideration, but if you are in no hurry to sell, I'd stick to my own timeline.
Posted on 8/12/14 at 12:25 pm to shel311
quote:It's true you can make your offer contingent upon selling your house, but that doesn't mean the seller of the house you want to buy will automatically accept those terms. So if you really love the house you want to make an offer on, you might consider a back up plan for the conditional offer.
I was unaware we could do that with putting in an offer contingent upon selling our current home, so that's good to know.
Posted on 8/12/14 at 12:28 pm to shel311
Water under the bridge now... but was this realtor referred to you? By someone you trust?
Posted on 8/12/14 at 12:28 pm to LSUFanHouston
quote:Yea, you're on the money here. We're in no real rush whatsoever.
Sounds like you all are in no rush to sell your house - it's not like you are holding two houses. He is a professional, and I would take his advice under consideration, but if you are in no hurry to sell, I'd stick to my own timeline.
quote:Dang, interesting way of putting it, really puts it into perspective.
Freakonomics has a chapter about this. Basically, if you reduce your selling price by 10K, since he gets 3 percent, he only loses $300. He may rather take $300 less today, then wait a few more months to sell.
His incentive is to get paid today, not potentially a few more bucks tomorrow. That's why he is telling you to sell now
Posted on 8/12/14 at 12:29 pm to LSUFanHouston
quote:Father in law
Water under the bridge now... but was this realtor referred to you? By someone you trust?
Posted on 8/12/14 at 12:30 pm to LSURussian
quote:What do you mean by this?
So if you really love the house you want to make an offer on, you might consider a back up plan for the conditional offer.
You just mean don't assume they'll agree to the conditional terms and to still be on the lookout until they would?
Posted on 8/12/14 at 12:35 pm to shel311
quote:Yes.
You just mean don't assume they'll agree to the conditional terms
And/or...
You could ask your banker if they would make you a "bridge loan" to allow you to buy your new house until you sell your existing house which would pay off the bridge loan and you would then get permanent home mortgage financing for your new house.
Banks do this type of temporary financing all the time but you have to have a good relationship with the bank along with a good credit score.
Posted on 8/12/14 at 12:38 pm to shel311
1 month is way too early to be lowering the price, IMO. Especially if you're in no huge rush to sell. Sounds like you have a shitty agent as well if comps have sold fairly quickly and you've had little interest from buyers.
Posted on 8/12/14 at 12:39 pm to LSURussian
quote:I really gotta learn more about this stuff, didn't even know some of these things existed. Would I be paying 2 mortgages in the meantime? That's not a big deal unless it starts getting into the months of no sell, which I don't expect to happen.
You could ask your banker if they would make you a "bridge loan" to allow you to buy your new house until you sell your existing house which would pay off the bridge loan and you would then get permanent home mortgage financing for your new house.
quote:I think I'd get in this category.
Banks do this type of temporary financing all the time but you have to have a good relationship with the bank along with a good credit score.
Posted on 8/12/14 at 12:40 pm to The Spleen
quote:Yea, this is definitely my bad here, I didn't shop around enough and rushed into this dude that I'm not really fond of now. Not that it matters, but I've voiced my frustrations and mentioned that I don't feel comfortable with his work. Not sure if that was a good idea or not.
Sounds like you have a shitty agent as well if comps have sold fairly quickly and you've had little interest from buyers.
Posted on 8/12/14 at 12:44 pm to shel311
quote:Usually on a bridge loan you would be paying interest only until your house sells and you pay off the principle. Interest is usually due quarterly on these loans so a bridge loan arrangement would cost you some interest but it would allow you to get the house you want and not make it contingent on selling your house.
Would I be paying 2 mortgages in the meantime?
You should contact your banker and inquire about the bank's policies on bridge loans, including how much you would be eligible to borrow.
The bank would also require a mortgage on the house you're buying.
This post was edited on 8/12/14 at 12:48 pm
Posted on 8/12/14 at 1:18 pm to LSUFanHouston
quote:
Freakonomics has a chapter about this. Basically, if you reduce your selling price by 10K, since he gets 3 percent, he only loses $300. He may rather take $300 less today, then wait a few more months to sell.
His incentive is to get paid today, not potentially a few more bucks tomorrow. That's why he is telling you to sell now.
This. And This:
quote:
but we're stuck in a 4 month contract with a termination fee(that was a rookie mistake, I know)
He wants to under price your house so you don't can his arse after three months, rather than doing his job and actually selling.
Posted on 8/12/14 at 1:22 pm to shel311
quote:
Father in law
Let me guess, he's partially retired and has maintained his license... Sounds like he slapped his name on a sign in front of your house to collect 3% from his wife's husband.
Prayers sent.
Posted on 8/12/14 at 2:46 pm to shel311
quote:
2. Not sure how to word the question/statement, but mainly how in the world do you time something like this in terms of once I sell my house and get a closing date, I'd have to quickly find a new house and hope to close before that date...I guess i'm looking for advice on how that process works, if that makes sense. I think the wife and I could decide on our next home fairly quickly, but still don't know or think that would guarantee a closing on the new house before the old house closes, right?
Just went through this exact process in moving from Los Angeles to Houston. Signed a contract to sell on a Friday and was in Houston on Saturday looking at houses. Ended up finding the house that following Wednesday and getting my offer accepted. Originally had it to close on my house in LA on the 25th, and my new house on the 31st, but the closing in LA ended up getting pushed back. Luckily we were able to re-work the loan docs so that the purchase wasn't contingent on the sale and I had enough cash to cover without selling.
Anyway, it's tough. Just have to know where you want to look and exactly what you're looking for. We ended up closing on our purchase in 25 days, so it can happen fast.
Posted on 8/12/14 at 5:26 pm to TigerFanInSoCal
We signed a purchase agreement on a house on a Wednesday with the condition that we had 6 months to sell our home. NEVER thought they'd accept the 6 month part but they did -- we live in a small town. Listed our home 10 days after signing the purchase agreement and 2 weeks later our home was sold. I was SHOCKED.
The thing was that the "new home" would continue being shown if anyone showed interest but it was never shown again. I was kind of afraid someone would come in and love it and offer cash with no conditions.
Worked out great ... closed on the old home on a Wednesday and the new one on the Friday. Just didn't work out to do it in the same day (sellers for new home were out of town).
Good luck.
The thing was that the "new home" would continue being shown if anyone showed interest but it was never shown again. I was kind of afraid someone would come in and love it and offer cash with no conditions.
Worked out great ... closed on the old home on a Wednesday and the new one on the Friday. Just didn't work out to do it in the same day (sellers for new home were out of town).
Good luck.
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