Home Buying in 78230>Question Details

Diana, Home Buyer in 78230

Do you need to have your home sold in order to buy a pre-foreclosure?

Asked by Diana, 78230 Thu Jan 29, 2009

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10
Linda:

Are you asking if you can purchase a short sale with a home sale contingency? If so, the answer is no.

I have had clients in the past that decide to buy before selling-I have to tell you that it rarely works out as expected. Call me crazy, but it seems the new house puts a jynx on the old :) Especially in the current market where homes are staying on the market longer than typical.

The advice I give to my clients that have a home to sell is to wait until their home is in contract with a buyer. You can have your agent write a suitable housing contingency so that you do not have to sell if you do not find a home to purchase. Or, you sell and rent for a few months until you can find the right deal for you, build a new home, whatever. Renting for a few months is is my favorite because I have found that these buyers are ultimately happier in the end that they waited.

If you are looking at short sales, beware. You can find good deals, however you can also wait for months to end up with a rejected offer.

Best of luck with your selling/buying
1 vote Thank Flag Link Thu Jan 29, 2009
You already have received several good answers.

You might want to reconsider your exit strategy for both properties. If you want/need to sell your current home first, then you may need to modify your price and/or terms. However, you might not want to sell it before you've at least put the second one under contract.

Also, in case you never thought of this, you might consider selling your home offering some form of seller financing. This will open your property up to more potential buyers.
1 vote Thank Flag Link Thu Jan 29, 2009
As long as you have an exit strategy. This could be a worth while endeavor. Meeting with your financial consultant is highly advised. There is great potential for instant equity . I highly advise you to consult a local realtor that specializes in Short Sales and Foreclosures. This will assure you of the most educated advice.
0 votes Thank Flag Link Fri Jan 30, 2009
I forgot to mention earlier that you have another option. Since processing a pre-foreclosure will take some time (because you're negotiating with the seller, the first lien-holder, and all of the other lien-holders [some of which might be government entities]), you'll have some time to shop around for your financing, and you'll have some time to market your property to both buyers (including investors) and renters.

If you're currently unrepresented, then you really should find a realtor who specializes in pre-foreclosures and 1031 exchanges. Pre-foreclosures aren't for the faint of heart, there are lots of 'T's to cross and 'I's to dot, and you really should work with someone who knows what s/he is doing if this is your first pre-foreclosure purchase. Agents who specialize in 1031 exchanges are used to handling both sides of this buy/sell transaction, and they often already have a pool of buyers/sellers/renters in their networks. Also, keep in mind that 1031 exchange buyers have to move fast, so if you need/want to move fast, then this might be your best option.
0 votes Thank Flag Link Fri Jan 30, 2009
Lots of questions in there.

Do you mean will the seller accept a contingency. Pre-foreclosure is perhaps no different than any other home, but you may have a short contract period before your contract becomes invalid, unless you can qualify for two loans....your current and the new one, that assuming you have a loan currently and need a new one to purchase the new home. If you can only have one loan at a time, then yes you will need to sell your home first.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Thu Jan 29, 2009
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Diana,

There are several ways to look at this as Amanda pointed out. You definitely should speak with a lender to see what they say as without knowing your financial situation, its hard to truly gauge what you're capable of purchasing. If you have a Realtor, ask them for a good recommendation or go back to your lender (if you're happy with them) who helped you with the house you currently own.

My next question would be whether or not you've already listed your current property. If it is on the market, how long has it been there? Ask your Realtor to re-evaluate your listing if its languishing on the market. If it isn't listed, you should consider doing it sooner rather than later. If its a great house, in a good location, in good shape, priced right and marketed appropriately; it can sell a lot faster than you think. The phones are ringing these past few weeks, San Antonio is back in the market to buy homes.

It would also help to know more about the property you've got your eye on. If it just went on the market, you may have time (as long as no one else makes an offer). If its getting real close to foreclosure, your chances get slimmer. It helps to know a bit of history behind the house and a good Realtor should be able to do some research into the property and at least give you an idea...you may even have some personal knowledge that would help.

I hope that helps you out and gives you an idea of what's possible.

If you need anything, feel free to let me know.

(Also, let me know a bit about your home...I'm working with two buyers right now looking in that zip code, you never know, it might be just what they're looking for.)

Matt (contact info is on the site)
0 votes Thank Flag Link Thu Jan 29, 2009
If you are planning on leasing your current home, then the lenders will count 75% of the rent received as income. Or you may buy the pre-foreclosure as an invester by putting at least 10-20% down provided you do not have mortgages on more than 3 investment properties. So, bottomline, you need to see if you can qualify for a mortgage, or just pay cash for the pre-foreclosure.

It's a great time to buy, so your efforts are not in vain! Let me know if you need assistance!

Amanda Herring
Accredited Buyer Representative
San Antonio, TX
(21)) 771-8608
0 votes Thank Flag Link Thu Jan 29, 2009
You will have to qualify for both loans and likely have quite a bit of equity in the old one.
0 votes Thank Flag Link Thu Jan 29, 2009
Hi Diana,

It depends on your purchasing power...consult with a Lender to determine if this is possible. If you have any questions or need a Lender you may contact me directly.

Best regards,

Mattye P. Smith
Realtor
mattye.smith@vrimail.com

American Reators
0 votes Thank Flag Link Thu Jan 29, 2009
No you don't , as long as you qualify for 2 loans, you should be able to do it.

Don't get yourself into such a situation, unless you really feel comfortable with your financing circumstances.

Naima
0 votes Thank Flag Link Thu Jan 29, 2009
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