Home Buying in McKinney>Question Details

Pb, Both Buyer and Seller in McKinney, TX

In this economy, what are the chances to sell a home in Princeton (3 yrs old) and buy one in McKinney (make buy contingent upon selling the other)?

Asked by Pb, McKinney, TX Mon Mar 22, 2010

We have excellent credit, low debt, good jobs but cannot maintain 2 house payments (we cant buy house and wait for the other to sell). We are willing to go smaller/ older/cheaper to achieve this. We are also looking a home with gas kitchen and fiber (ie fios or u-verse).

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Naima Sumner’s answer
It would put you at a great disadvantage as a buyer if your house in Princeton isn't under contract first. Consider selling it first and may be even moving in with relatives to temporary housing or work out a leaseback with the new owners. This would make you a stronger buyer and in a better position to negotiate better on the new home in McKinney.

This doesn't mean that you have to stop looking, you can always go look at homes so you can have an idea of what you will get for your money and even narrow the areas of McKinney that you want to live in.

Naima
214-289-8555
Naima@Sumner-Realty.com
Web Reference: http://www.SumnerRealty.com
1 vote Thank Flag Link Mon Mar 22, 2010
BEST ANSWER
Hello PB,

Sellers will be less willing to accept a contingent contract as we get into the spring season. Their potential for finding a buyer without a contingency now is greater. However, this is a case by case choice for the seller and their options depend on how long their house has been on the market, how flexible they are on their move, and the reason they are selling. At the same time, your property in Princeton is a large factor in how well this works. If your property is in great condition, priced right, and is likely to sell quickly, then it might be a good opportunity for a McKinney seller to accept a contingent contract.

Most sellers who purchased a home 3 years ago will not be able to get what they paid back out of a home in the current market. However, if you sell your Princeton home, even for a loss over what you paid for it, you can still come out ahead because the McKinney home you buy is also priced lower than it would have been 3 years ago. Think of the transaction as what you save on the buying end, not what you loose on the selling end. Interest rates are also better now than they have been and will be in the future so you may see some added benefit to a move there.

Excellent credit, low debt, and good jobs put you ahead of many other buyers in this market. This is another bonus to help your agent negotiate a contingent contract with a seller.

One other option is to lease your house in Princeton and buy in McKinney. You must have equity in your Princeton home and enough cash for down payment and closing cost on the new home. You will also have to have a signed lease on the Princeton house before a lender will approve the loan for the new home. This is to prevent property owners from buying a new house and bailing out on the mortgage for their first home.

What you need now is an agent to analyze your Princeton property, your new home needs, and provide you with the information you need to make an informed decision. Give me a call! I'm here to help.

Make it a great day!

Patrick Jackson
Realtor, ABR, E-Pro, GRI
469-450-8315
http://www.CommittedService.com
0 votes Thank Flag Link Mon Mar 22, 2010
Pb - You may find this article interesting.

Buy down points to get the deal done
By Steve McLinden • Bankrate.com

https://www.bankrate.com/finance/real-estate/buy-down-points…
0 votes Thank Flag Link Wed Mar 24, 2010
Pb - Anything is possible! Prioritize your actions and implement a plan.
#1 - Interview at least 3 agents... then choose wisely.
#2 - Prepare your home to Show & Sell
#3 - Price your home aggressively PLUS offer an up-front financial incentive for potential Buyers.

Buyers are NOT one price fits all - If you want to get top dollar for your home, you need to expand your pool of potential Buyers. Motivated Sellers who offer a 3- 4% concession toward closing costs and or discount points to reduce a buyer's interest rate/payment increase market potential by improving affordability for your potential Buyers. (Permanent or Temporary Buydown) Understand that if a bidding war ensues, you may withdraw the concession from the table and bring that cash to McKinney!
Good Luck with your move!

Calculate the small cost for the Seller & the Huge savings for the Buyer:
0 votes Thank Flag Link Tue Mar 23, 2010
There's 2 immediate problems you are facing from what you've described. First problem is the downsizing option. Unfortunately, that is not an option as there is no lender currently still in business that would even be able to underwrite a loan that involved the buyer going into a downgrade. These types of solutions were very popular before the housing crunch and taught us a few lessons. For instance, buyers would do just what you're describing and get approved for a new home that was a smaller mortgage payment and let the other one just go listlessly off into foreclosure wasteland. So unless you are planning on buying it as an investment property with at least 20% down, I would say it would be safe to scratch this idea off the list. Your second problem was already addressed in terms of the market not being strong enough to bear a contingency type sale. As mentioned, we are in a buyer's market and unless your home has something extraordinarily unique that may suit a specific group of buyers (and you could very well have such a property), my prediction to you unfortunately is that you may find you are better off waiting just a bit longer.
If you want to get a head start on next year however my advice to you would be start renting! You start looking for a rental property that is less expensive than your mortgage (since you were willing to downgrade it should not be hard to find) and rent out your home for enough to cover the mortgage and put a little something in the bank each month. By now you've stopped reading and dismissed me as a lunatic, I know . . .But here is what we would be doing:
You and your spouse find a relative, co-worker, or just very trusted friend who just happens to need a nice place to stay in Princeton. You go ahead and have them sign a 1-2 year lease and the problem is solved, as so much you will still be able to get a loan from most lenders since you've had an income producing investment property and a small rental of your own for the past 12 months, you qualify on all parts.

1. You are upgrading considering your leaving a rental.
2. Your DTI will be covered as 75% of the amount received in rental income is considered cash-flow
3. You've now just become homeowners with an INVESTMENT PROPERTY TO BOOT! Let me be the first to congratulate you!
Great, so know you have this rental property and after 2 months into the new lease the renter walks away and until you can get it rented again, you have to pay 2 mortgage payments.The important thing is you make sure your rental rate covers the mortgage and gives you a little something to put in the bank. After 1 year, go to a lender and have them re-qualify you with the rental and if your friend does not renew, you put it back on the market after they move out and the extra money put away in savings can be used to pay the mortgage and for marketing the property for lease again. Win, Win, Win. Now I know this may seem a bit complicated just to buy a second home, but I can confidently say that market conditions this time next year may be better, but not by much.
Just a little outside the box thinking for you to consider.

Robert Regan
214-586-7224
Web Reference: http://www.RKRegan.com
0 votes Thank Flag Link Mon Mar 22, 2010
I believe you have received enough answers to know selling your home in Princeton would need to be done first. Getting all of the information you need to sell the home and information on the various pricing strategies based on your current situation is also a very good idea. A Comparable Market Analysis will provide you with the details on average days on the market, pricing, and how to make sure your home is better than the competition.

Fios and U-verse are not available everywhere in McKinney yet, so this would narrow down the areas in which you would be interested in, and after you have a general idea as to what you would be able to afford to purchase, this would also assist you in your decision making process. There are many wonderful neighborhoods in McKinney and beginning this process now during what we consider the "busy" period because more homes are sold and bought from now through the end of summer, providing you with many great homes to choose from!

Just let me know when a good time would be to meet with you and go through all of the information and the different strategies to fit your desired outcome.

I am well acquainted with the McKinney/Princeton/Farmersville area. I live in McKinney as well!

I look forward to hearing from you!

Tami James
The Michael Group
tami@dfwrealtyonline.com
214.557.5121
0 votes Thank Flag Link Mon Mar 22, 2010
PB,
You have already received some great advice below. Here is a recap of the steps you should take, and a few new ones have been included.
1. Have a Realtor provide you with pricing information on your home in Princeton. See if you can afford to sell before making any further decisions. Most people need to live in their home for 3-5 years before they can afford to sell it at a break-even or a profit.
2. If you decide that selling the home in Princeton is an option, then you want to list the home for sale. While the home is for sale you will want to visit with a mortgage professional to get the details on a new mortgage. Make sure you know the interest rates available and downpayment requirements.
3. Once your home is listed for sale in Princeton, have your Realtor start sending you automatic updates of homes available for sale in McKinney that meet your needs. You can keep a close eye on the real estate market there while you are waiting for a buyer on your home. This way you will be an informed buyer.
4. After you get an offer from someone to purchase your home in Princeton, you will be ready to buy in McKinney. DO NOT make an offer to buy anything in McKinney until you have someone ready to buy your current home. Once you have a buyer for your home, you can make a contingency offer to purchase the new home in McKinney.
5. Timing will be critical at this point. Make sure that you use the same agent for your home sale and purchase so that the process will be streamlined.
** another option - as stated below - is to sell your home in Princeton and go into temporary housing while you look for a new home in McKinney. However, if you sell and buy now (and have a contract to purchase your new home by the end of April) you may qualify for up to $6500 as a federal tax credit.

If you would like more information, or if you would like to see a comparable market analysis of your current home to help you determine a value, please contact the North Texas Top Team, Realtors. There is no cost or obligation for this information, and it will help you get a preliminary idea of the value of your home should you decide to sell it. Our office is based in Wylie, TX and we help people in Princeton and McKinney on a regular basis with their real estate needs.

Melissa Hailey
Coldwell Banker Jane Henry Realtors - North Texas Top Team, Realtors
214-418-0180
Melissa.Hailey@ColdwellBanker.com
0 votes Thank Flag Link Mon Mar 22, 2010
PB,
Your first move is to list and sell your house in Princeton. I would not advise anyone to make an offer until their current home is under contract. Firstly, a contingent offer is not an attractive one to a seller and so you are already disadvantaged when it comes to negotiating the contract. Once you have a contract on your current home you are in a much better postition to find a new one. Secondly, you may find the perfect house and then be dissapointed when you are unable to buy because your's has not sold.
I would suggest that you talk to a Realtor who can give you good current information on the market where you live in Princeton. Make sure that your house is in the best condition that it can be so that it shows well. Price the home competively for the market.
Once you have all the facts on your current home, you can then make the decision on how to move forward.
I am happy to meet with you to discuss the current market and make sure you have all the information that you need. I can help you to get your house ready to show before I list and market it for you.
Please contact me if I can help you.

Sue Riley, Realtor, GRI
RE/MAX Four Corners

469-774-4867
sueriley@cableone.net
0 votes Thank Flag Link Mon Mar 22, 2010
You definitely want to have your home under contract in Princeton before you go looking for a new home. As far as getting that dones it depends on many factors, however their are alot of buyers out there now. As stated below this can very easily be done by working with a Full time Realtor. I would love to come and talk to yall about selling and show you how my 4% total MLS listings and 20% rebates to buyers can save you a good amount of money.

thanks
RJ
214-682-0598
0 votes Thank Flag Link Mon Mar 22, 2010
I concur with Ronda... most likely, it will be tough until the house sells. My advice is take your time to make sure that you get what you need in the long run. Today - A house is not something you can sell quickly if it doesnt work out. A suggestion is sell your house and take a short term rental till you find exactly what you need.
0 votes Thank Flag Link Mon Mar 22, 2010
List and sell your home in Princeton first with a Collin County Realtor associated with the Collin County Association of Realtors. Once you have a contract on your home in Princeton, a seller in McKinney will be much more likely to accept your offer. If you're working with a full-time Realtor who is knowledgeable of the McKinney housing market, they can find you a home to buy in one weekend - while your home inspection is happening on the home in Princeton. Then, both contracts can run concurrently and closing dates can be coordinated to allow you to make once move from your old house to your new home. That's what we do.
It's a great time for local buyers to move up, cross, or down to accommodate their life goals. Interest rates are still low, and if we're dealing with local Texas lenders who do their processing and Underwriting in the state of Texas, we can still get you closed within 10-15 days of executing (both parties signing) your McKinney contract.

5 of the top real estate markets in the nation were in Texas in 2009, and we're even stronger in 2010. You're in good shape to start the process whenever you're ready. And, there are plenty of buyers looking to buy in Princeton. The schools have a good reputation and the area has been growing for several years. The home buyer tax credit incentive is still in effect until the end of April, so list sooner rather than later to make your home more attractive for a contract before the end of April and a closing before the end of June.

Have a blessed day!
Ronda
0 votes Thank Flag Link Mon Mar 22, 2010
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