In My Neighborhood in 33413>Question Details

Kathy, Both Buyer and Seller in 33413

I want to buy a home for cash.Presently own a home with no mortgage. I need to sell in order to buy without doing a mortgage. I need some advice.

Asked by Kathy, 33413 Sat Jan 2, 2010

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Hi Kathy,
You have some options.
1. You can buy, contingent on the sale of your home. This would require you to sell quickly to maintian the sellers interest. You lose some negotiating ability because a contingency like this can be like asking for a discount.
2. You can list your home for sale and keep an eye out for what you want to buy once yours sells. This would give you the maximum potential for getting the most out of your home. If yours sells, and you don't see what you want to buy right away, do a short term rental.
3. You can likely qualify for a mortgage, since you don't have one already. Find the home you want, buy it and move into it then sell yours. Once yours is sold, pay off the mortgage, or invest the proceeds from your sale in a safe place and enjoy the low rates and tax deduction. The only downside is the lender fees and the interest you'll pay until you sell.
I hope this helps.
0 votes Thank Flag Link Sun Jan 3, 2010
Kathy, the advice from Terri, that you consult a financial advisor is good. There is a particular advisor that I swear by, whose name is Ric Edelman whose views I will employ here. The other advice about getting a bridge loan is good too, but after you buy the house, all cash, Ric will advise you to refinance and take back out as much of the funds as you can and invest it otherwise.

It is perfect to buy all cash because in more cases than not you will command a discount of up to 20% as long as you find the right seller who wants out expeditiously.

By the time the dust settles you may be able to take back out all of the funds that you are working with. Even if you cant be convinced to invest the funds, cash is king. you never know when your next door neighbor may suddenly decide to leave you a bargain that you cant refuse if you have cash. By the way when you are refinancing out all the money that you placed in the house, you certainly will not volunteer that you have removed it all, this is none of their business. Although they can find out if they take the time to dig.

I have acquired a label of being "deceptive" so my detractors will have a field day with this tomorrow. However when your lawyer orchestrate the deed on your new property, it is likely to say that you paid $10 and other valuable considerations. Some could say that is so deceptive, because you are hiding what you paid. My aphorism: "be careful when you make rules for others to follow, the exceptions may come back to bite you".
0 votes Thank Flag Link Sun Jan 3, 2010

The best advice for you is to get recommendations for a Realtor in your area (I can do some research for one for you if you would like a referral). Interview the agents. Your situation and goals are not apparent here in order to answer effectively. This is best done on a one-to-one with the agent. Questions will come up and based on your answers will determine what advice you receive.

I also recommend you talk with a financial adviser (not one who specializes in selling securities) but one who will look at your situation from a financial picture.

Congratulations on have a zero mortgage. This gives you a lot of options.
Web Reference:
0 votes Thank Flag Link Sat Jan 2, 2010
Is there a reason you don't want to have a mortgage? If you're a drug trafficker or illegal alien I understand; but with interest rates in the low 5's, couldn't you put just 3.5% down (FHA) and bank the rest at a higher interest rate than your mortgage and pocket the difference?

Or talk to the owner of your "new" house about seller-financing and skip the traditional mortgage all together, and keep your payments sickeningly low until you sell your old house, then pay off the seller?

My two cents.
0 votes Thank Flag Link Sat Jan 2, 2010
Hi Kathy,

If you would like a Comparative Market Analysis I would be happy to do one for you. Depending on the location, size, and condition of your current home it may sell quickly.

I look forward to hearing from you.

Nadine Mauro
Realty Hub, Inc.
0 votes Thank Flag Link Sat Jan 2, 2010
Yours is a tricky situation; as, in my area, most Sellers won't take their homes off the market to wait for the Buyer's home to sell. I understand you don't want to have a mortgage on your new home; but, have you thought about taking out a home equity line of credit (often referred to as a HELOC) on your existing home to come up with enough cash to buy your new home while your old home is listed for sale? If you have a good credit score & report & your existing home appraises well, you might be able to accomplish the best possible outcome -- a new home that you love & an old home that sells quickly, so you can pay off the HELOC. Perhaps you should ask a couple of Realtors to do a CMA (Comparative Market Analysis) of your existing home & talk to a couple of lenders about a HELOC that you only draw on when you need to purchase your new home, if your old home has not sold first.
0 votes Thank Flag Link Sat Jan 2, 2010
The first step would be to have a Realtor do a Comparative Market Analysis on your home so that you can get a ball park figure on how much you could possibly spend on your next home. Then you will need to get your home listed and under agreement before you look for your next home. However make sure your offer on the next house includes a clause that allows you to back out of the deal if your home sale falls through.
0 votes Thank Flag Link Sat Jan 2, 2010
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