Home Buying in Portland>Question Details

Bart Betz, Other/Just Looking in Portland, OR

Moving before selling

Asked by Bart Betz, Portland, OR Fri Apr 12, 2013

When you see a home for sale that is empty, is it safe to assume the owners have moved into a new property and are currently making 2 mortgage payments? How can people afford to do this? How can they qualify for a large loan on a larger home in the bank's eyes, when some of these properties go unsold for extended periods? Can someone shed some light on this?
I'm getting ready to sell, but don't really have any intention of buying another property, while my 1st home is still unsold.
I'm also wondering what happens if you sell your home, and can't find the "Right" home for a while. Do you move into an apartment or condo?

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Answers

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Hi, Bart:

Unfortunately, some of the current reasons you'll find vacant homes is because homeowners are possibly unable to continue paying their mortgage payment and are in the process of losing that home. So they're not likely making two mortgage payments.

On the other hand, there might be some who have had to move from their home due to a job/locaton change, and have not yet put their home on the market.

I believe it's safe to say that there can be many reasons why you'll see some empty homes. So I wouldn't make any assumptions as to what their circumstances are for leaving the home empty.

As far as you getting ready to sell, it is probably a really good idea not to buy another property until you've sold yours. Here are a couple of reasons not to - 1) As you mentioned, you won't have to be making 2 mortgage payments; 2) The longer it takes to sell your home, the longer you would be making 2 monthly payments (not counting 2 sets of utilities, homeowners' insurance, and taxes), if you chose to purchase another one beforehand; 3) You'll definitely have less anxiety, not having 2 mortgage payments at the same time. These are just a few reasons not to purchase another home before you sell your current one.

If you are successful in selling your home promptly (which may be very possible in our current market, depending on the price point and location of your current home), you could very well end up not being able to find the 'right' home for a while. In that situation, many have moved to apartments or condos, or possibly even have lived with relatives.

There are some possible creative solutions, however, in finding your next 'right' home. Please feel free to contact me, and I'll be happy to provide some suggestions in that regard.

Best regards,

Ruth Velez
Fairplay Realty Elite
503-975-525
1 vote Thank Flag Link Fri Apr 12, 2013
Bart,
Some people are lucky enough that they can afford more than one home at a time, but a majority of people are like yourself and will not purchase a new home until they are able to sell their current home. Once you do get an offer on your current home the key to finding your next home is speed. We have three agents in our group that just show homes, they are online everyday many times a day looking for new listings. When they find a great home, that's when the speed comes in to play. They is always one of my agents that can show you the home right away. Feel free to contact me with any other questions you mat have.
1 vote Thank Flag Link Fri Apr 12, 2013
Bart,

It is tricky to buy and sell a home at the same time without feeling considerable pressure on both sides of the transaction and depending on your purchase price and location, it might be darned near impossible with the current low inventory and multiple offers going on in the Portland Metro area. But an experienced Realtor will walk you through the process and offer you a variety of solutions to meet your needs.

First, you do need to speak with a Lender to determine how much money you can spend on the home you want to purchase. Where are those funds coming from? If part of the money for your new down payment is coming from the sale of the home you live in, then you will need to sell that home first or near simultaneously to complete the new purchase. Some sellers will consider a Contingent Offer, meaning they will accept your offer to purchase their home, knowing that you much complete the sales transaction on the home you are living in. Again, much depends on the price range and market you are selling out of and buying into.

Once you understand the financials, then you will need to list and sell your home. A good Realtor here is worth their weight in gold, to help you stage and correctly position your home to sell quickly and for top dollar. Making a contingent offer on your purchase is much easier when you are under contract with your own buyer. You will also need to prepare yourself that an interim move may be necessary so you can find the perfect home to purchase.

This is just one option. There are others that have been mentioned and some in between. We deal with this all the time and successfully help folks move in and out of homes and into new homes, but it does take a certain amount of skill to line up all the ducks or in this case houses, so to speak.

If you would like to discuss your individual situation, please arrange for a consultation to determine the next steps. Really, this will be fun - new house, new start:)
0 votes Thank Flag Link Sun Apr 14, 2013
Bart,

Often I get people 105 days to find and close on a new property. Once you accept an offer on your home we could set up a 45 day closing and then add on top of that a 60 day seller rent - back. You won't pay the full 60 days if you find something and close on it faster. That is about as long as you can rent back without causing problems with the loan of the buyer of your property. This situation works well for most clients, but everyone's situation is different.

Let me know if I can be of more service.
0 votes Thank Flag Link Fri Apr 12, 2013
Hi Bart,

There are a number of options to keep yourself protected as a seller. Something that has worked well in the past for my sellers is to make the sale contingent upon an acceptable new place. This takes the stress out of having to feel like you are rushing into something or settling. I live right in your neighborhood and I am happy to answer any questions you might have before you take the plunge! :)

Good luck to you!
0 votes Thank Flag Link Fri Apr 12, 2013
Great question. One can never assume why a home is empty when it is on the market. There are so many reasons, house is paid for already, they are moving in with family, this was a second home or an investment home to begin with. Don't worry about it if you are interested in that home to purchase ask your broker to see what they can find out. What I would wonder is does this mean they are more or less motivated?
Planning ahead of time if possible to know what to do if your house sells and you find yourself homeless. Many times the new buyer will allow you to rent back your house for a month or two. I think it is best to rent something not too comfortable so that you will concentrate on buying a home instead of renting. If you are moving to an area away from where you are now living renting is a good idea so you can gain a better understanding of where you want to live. If renting another place pack things you must have and put the rest in storage. When we moved from LA to Bend our moving company put our items into storage for us and then a couple of months later when we actually closed and moved to our new house we hired a local crew to move our "stuff".

Just remember to think through the what if and talk to your real estate broker and make certain
you have looked at all your options and how they will affect your life style, finances & stress level.

Susan Agli , Broker- esc2bend
Coldwell Banker Morris Real Estate
Licensed by the state of Oregon
0 votes Thank Flag Link Fri Apr 12, 2013
Question1, 2, 3 & 4) Some owners rent and the others pay two mortgages (or not paying if short sales). They may have a good size equity or the loan payment is lower than 10% of their income. No matter how you look at it, they are bleeding.

Very safe choice on your part.

Q4) This happens often right now due to the "Flash Low Inventory." It is hard to find the "Right" Home whether you have a home to sell or not. You need to analyze the reasons for selling and your situation. A good agent should show the options for you to choose smartly.
0 votes Thank Flag Link Fri Apr 12, 2013
Hi Bart,

Great questions! My personal opinion is that it is never a good idea to assume anything. Some of the homes that you see sitting empty could be bank owned, short sales, going through foreclosure, or as you pointed out - the seller's could have moved out before selling.

There are people out there that move due to a company transfer, sometimes the company will buy the property and sell it. Other times, the homeowner will move and then place it on the market. There are also people with deep pockets who can more than afford to carry two mortgages.

Most homeowners will sell their home before taking on another mortgage. I always encourage my clients to sell their home before buying; however, there is no harm in looking for another property while your home is for sale. You can also make the sale of your home contingent upon you finding another property. If you have any questions, please feel free to contact me
.
0 votes Thank Flag Link Fri Apr 12, 2013
Sounds like you are trying to play poker. Assuming they are making multiple payments is not the way to do it. Never assume anything. You can ask thelisting agent or your buying agent where the seller is and what they are doing. They might not tell you but you can ask. You can go through county records to see if any other properties show up as theirs.

Its a tough game to sell without knowing where you will be going---on the other hand you could enter into a purchase transaction and have your sale fall apart. You can make an offer 'contingent' upon your home closing but many sellers dont like that.

As for what you do---we cant answer that. Id personally try to find an inexpensive rental with no long term lease. I dont know if you are alone or your age or job proximity needs.

I dont know about now but lenders used to subtract the debts of a house that the seller/buyer owned as long as it was in escrow. Of course it could fall apart so that was risky for the lender. The mortgage world and underwriting has changed hugely over the last 2 yerars.

In short, would need to know a lot more about you and your needs to properly give advice.
0 votes Thank Flag Link Fri Apr 12, 2013
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