Home Selling in 02144>Question Details

OA, Both Buyer and Seller in 02144

Sell first, Wait and then buy?

Asked by OA, 02144 Wed Jan 14, 2009

My husband and I bought our first home - a condo- four years ago. We want to sell and move into a single family home in a cheaper neighborhood. We bought our condo for $400,000.
In the current real estate market, our condo is apraised to sell for between 370,000 and 415,000. We owe $361,000 and our payments (because we have two loans) are very high (at $2,600 a month). At current rates, if we refinanced, our payments could go down by as much as $700 a month.

My first question is - Does it make sense sell first and then wait to find our dream home before buying? (In the meantime, we can rent a friends condo nearby for $1400/month. )

My second question is; considering that our dream home in a less expansive neighorhood will cost between $ 280,000 and $380,000 is it wise to take advantage of the buyers market to move now?

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Answers

7
If your life can handle the stress of moving twice, then sell in the spring market and buy in the fall market. Prices tend to be at their highest in the spring, so take advantage of the better sales environment. You can try to buy as soon as you sell, but you may need to wait until fall when fresh inventory comes on. Summers tend to be slow in our area. Good luck!
0 votes Thank Flag Link Wed Jan 21, 2009
Your situation is a very coomon scenario. Regarding refinancing, guidelines have tightened. If that is a consideration, you may want to consult with your lender.
It would be a good idea to consult with a real esate professional to develope a plan of action. It sounds as though selling first would be your best option, especially where you can rent your friend's condo. This would allow you to wait for the special home. Would your friend be willing to rent month to month, or ask you to sign a lease?
Web Reference: http://www.bobbittelari.com
0 votes Thank Flag Link Wed Jan 14, 2009
You can try to buy and sell at the same time. You need to make the sale of your existing property contingent on you finding your next property. I've helped home owners do it a million times. The issue with this is that you might be putting off potential buyers. Those buyers have so much choice these days that they could walk while you are searching. There are a lot of variables. Let me know if you have further questions.
Web Reference: http://www.BowenBoston.com
0 votes Thank Flag Link Wed Jan 14, 2009
I would most definately sell first . Unless your able to make two payments. You could start looking and find something then place a contract on the property you are wanting to buy but when you do write in your contract that its subject to your home closing . Then if your home does not close then you are not obligated to buy the new house. Just don't get stuck with 2 morgage payments.
0 votes Thank Flag Link Wed Jan 14, 2009
OP,
The best option is usually to focus on selling 1st. It's a tough market, and a great Realtor can help organize a "united front" with your help, and get your property sold. Once you have a buyer, and have made it past the home inspection period, and increasingly perilous financing committment deadline. Begin your search, and hopefully you can make up the hit that you take on the sale of your condo, in the price of your next home. Remember, if they are selling now as well, market conditions affect them as well. Of course there are no guarantees as every property has a unique back story and set of circumstances.
Good Luck!

--John
0 votes Thank Flag Link Wed Jan 14, 2009
1. It doesn't make sense to refinance your current condounless you intend to stay for at least another 5 years (your mortgage broker can tell you the most accurate break point).

2. Even though you will get less for your condo now you will also pay less for the new home - so basically a trade off. With interest rates low and tons of inventory you are sure to find what you love.

Good luck!
0 votes Thank Flag Link Wed Jan 14, 2009
Almost always sell first UNLESS you are ready, willing, and able to carry two mortgage payments indefinately.
0 votes Thank Flag Link Wed Jan 14, 2009
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