Foreclosure in Fort Worth>Question Details

Se, Home Buyer in Fort Worth, TX

Fear of paying two mortgaes at once?

Asked by Se, Fort Worth, TX Sat Dec 29, 2007

Due to the growth of our family, we are in desperate need of a bigger house. Remodeling in our current neighborhood is out of the question so we are contemplating putting out house on the market and looking for a bigger house in a better neighborhood. However, we happen to live in an area where houses tend to stay on the market for MULTIPLE months and we fear the possibility of having to pay two mortgages at once. Any sage advice out there for dealing with such a situation?

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I did this about a year ago. Maybe the market was better but there are still houses on the market that were there when I put my old house on the market.

First I took a critical look at my old house and tried to guess who the most likely buyer would be. I guessed a young family. I figured they would not have money for paint and carpet and our house had not had either in a long time. I had those done as cheaply as possible and with an eye toward bringing light into the house.

I had the yard weeded and edged and cleaned and trimmed. It was winter but I wanted the house to have the curb appeal of a well manicured home. I did other small things such as replaceing switch plates to match the new paint and replacing my compact florescent bulbs with incandesent bulbs so the house would look brighter as buyers walked thru.

I could have priced it right along with the other houses for sale and come up with a list price of $142000 or so, but I priced it at $137500 instead. I am a real estate broker and listed it with my company. I did not pay a commission to my company but I did pay to the selling company and was glad to do so! It went under contract in about 45 days at full price.

I did guess wrong who would buy the house. I ended up being an older retired couple.
I wanted to sell fast so I would not be making two payments. I am glad I did it the way I did. I did not price it with any bargining room, but instead priced it low enough that it looked wonderful compared to those home priced about the same.
1 vote Thank Flag Link Sun Dec 30, 2007
Great question from a consumer!!!
My opinion? Always sell first, get your money in the bank and then rent until you find a great buy. That way, you are postioned to buy with cash and can make an even better "I can close quick" type buy! That puts you in the drivers seat...best place to be in this market.
1 vote Thank Flag Link Sun Dec 30, 2007
Sell first, then buy. In fact these days I would recommend going all the way to closing before you plan to move out of the first place, due to the number of buyers who can' t complete the closing. Price your home to sell so that it will sell quickly. It may create some inconvenience for you during the move, but much better in my opinion than carrying two mortgages.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Sun Dec 30, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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I read your other question first and then this one....Start interviewing Realtors right now. While I agree that carrying two mortgages can be difficult for many households, there are other factors to think of as well. What if the perfect house for you came available and it was 50K below CURRENT market value? Would it then make sense to pay an extra mortgage of 1300 a month for 6 months IF AND ONLY IF your household budget can handle it? YES! And renting is always a possibilty, if you are willing to endure some of the hassles and financial responsibilities of being a landlord. A good, seasoned, Realtor can help you make these decisions and offer other options that you may not have considered. Every persons situation is a little different, and a good seasoned Realtor can offer options specifically tailored to you and your financial situation.
0 votes Thank Flag Link Mon Dec 31, 2007
Wow! This is all great advice. The different perspectives here are great. Many thanks to all who have responded thus far, and to those who haven't weighed in yet, keep 'em coming!

Since I've posted this question, my wife and I have read the answers here and have decided that we will most likely sell first, rent (one way or another) and THEN buy. Our only issues will be how to price our house (which Glenn was kind enough to expand upon). We still owe quite a bit on the house thus we don't want to price ourselves out of business and diminish our bargaining power (our hope/goal is to use what we glean from the sale to make a sizable down payment on the new place). But, that's what an agent is for, right? ;)

I do have a follow up question to this, but since it changes tack a little (and I want to maintain the continuity of this thread) I'll post it as another separate question.

Thanks again to all, and keep those answers coming. :)
0 votes Thank Flag Link Mon Dec 31, 2007
SE...In my opinion, don't do it...that is put yourself in a two mortgage position unless you can stomach the emotional rollercoaster of being responsible for two mortgages and the distinct possibility of your home not selling in the timeframe you would like it too. I personally was in that position late last year, except my exposure was for two 600K homes with another home that was being built and was due to close early 2007. I was lucky and had contracts on both the same night, and ended up closing on the same day too. It worked out financially although I brought $$$ to the table on one just to get rid of it. Emotionally, it was a drain and I wouldn't encourage it on anybody. The suggestions received so far are good. My opinion would be to selll your house first, possibly rent back for a period of time(put it in the contract) to give you enough time to look for another. Depending on your area's rent to price ratio's, renting my not be such a bad idea. And remember, in some respects, your really renting from the bank vs a landlord when you take out a mortgage. Just something to think about. I personally am trying to now sell that new home I bought as mentioned earlier, and looking for another, to take advantage of buyer's market and great builder's buydowns. I advise getting as much info from a variety of sources to get a feel for the economics of your area and go with your gut. In this type of market, if there is a home your really interested in, and it get's sold before you are ready, just remember the catch word for this market "NEXT".
0 votes Thank Flag Link Sun Dec 30, 2007
Well, I just checked the market out there and it's not bad at all. There are 4 houses on the market only of which one is a foreclosure and is under contract.

Without going into details about which, the marketing has a lot to desire such as the following:

- First one doesn't have any photos displayed... 20 days on the market and no pictures... that's a big no no.
It says something about the seller giving a carpet allowance, it would tell me that it's really bad inside that I don't want to show it to you.

-Second one has been on the market for 4 months and write up is just blank... I mean not a single word that markets the house... They have a couple of pictures though

-Third one has pictures and a write up... Actually pretty good one too. It's a discount brokerage firm and they are only offering 2% to the buyer's agents. In This market, I would NEVER recommend or offer to a buyer's agent less than 3%. 60 days on the market and priced wayyyy too high IMO for the small size of the house.

See, it's not too bad... ;-)
0 votes Thank Flag Link Sat Dec 29, 2007
"Do you happen to be in the Park Glen area?"
Actually I'm in the Edgecliff Village area. There's one house on my block has been on the market for at least 6 months. Several others are starting to hit the 3 and 4 month marks.

When we start to seriously look, we'll be focusing on the Crowley/Burleson areas (though we will be open to looking outside that too).

Thanks for the replies and the advice (Naima and William). :)
0 votes Thank Flag Link Sat Dec 29, 2007
I commend you for doing some homework and seeking advice instead of just putting yourself in such a situation with 2 mortgages. It is not fun and never worth it. You really need a Realtor to look at your house and tell you what condition it's in. You never know depending which neighborhoods in Fort Worth, some are selling faster than others. Do you happen to be in the Park Glen area? that is the highest inventory neighborhood of FTW...

It doesn't hurt to start looking at what is out there so you can have an idea of what you get in the price range you are looking at and compare neighborhoods etc...

The market is not too bad as the media makes it sound, if the house is priced right and is in good condition it will sell fast. The market is picking up. I already have several clients ready to start looking next week.

I'll be happy to visit your house and give you a market analysis and counsel you about the steps to take.

Putting a contingency on the sale of your house also protects you and you won't lose any earnest money, however usually you have to offer very close to full price for sellers to accept a contingency.

Naima
214-289-8555
naima@sumner-realty.com
Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Sat Dec 29, 2007
Don't underestimate how bad the market is. Unless you can afford an extended period with 2 mortgages, don't put yourself in a bad situation. You can look - but make any offer on a new home contingent on selling your old one. Good luck!
0 votes Thank Flag Link Sat Dec 29, 2007
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