I own a home now in Buena Park San Tract. The balance is $440k and the home I would think could sell for $475. We are looking to buy a newer home and

Asked by Murphy, Buena Park, CA Mon Dec 28, 2009

get out of this one. Our house is 90% remodeled and we have lived there for 15 years and have owned it since 1997. We would like to buy a home or a condo in the Kennedy High School area. 3 Bed and 2 bath min. We would use the money we make for the down of 5 to 10%. We are looking at a purchase price of 300 to 380k. Excellent credit. Willing to wait until the planets align. Actually, we will wait for the right timing. If someone bought ours we would need a home to move into. In the end...with PITI and MI we would be getting into better shape as we pay total now of: 1998.00 175.00 ins 60.00 taxes 200.00 = $2433 and that is an IO loan on first.

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Glenn Gaspar, Agent, Signal Hill, CA
Mon Dec 28, 2009
Hello Murphy,

In order to achieve your goal and be safe, your approach here will be based on the following:
1.) Discovering the true value for your home in order to determine what "cash on hand" you will be able to work with.
2.) Having proper verbiage within the sales contract in order to avoid being homeless when closing escrow.
3.) Performing due diligence on making sure the home your purchase is within the Kennedy H.S. district.
4.) Due to interest rates moving upward this week, it will be very important for you to determine your max target interest rate. So that in the event our loan market moves upward to a point you are no longer comfortable payment wise, you can re-evaluate your decision.

Since our inventory is very low right now, sellers seeking to sell have an advantage especially if you have any equity in your home.
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Karen Parsons…, Agent, Laguna Beach, CA
Sat Jan 2, 2010
Hi Murphy,

As the others have mentioned....you are going to be tight with the sales price/equity to put into a new home. But something to remember is that everything in Real Estate is negotiable. When you are buying and selling....it's a bit of a puzzle to get all the pieces to fit, but if they don't fit....you don't move.

You have a very valuable asset to a buyer.....you have equity. You are not asking them to wait for 6 months for an answer. Buyers right now wait months for a short sale only to find they are then asked to pay off past due HOA fees or extra money to pay off a second trust deed....and they do it. Something we can do for you is to ask a buyer to pay your closing costs. I have 2 homes in escrow right now with equity sellers who are having all their closing costs paid for by the buyer.

As far as commission goes, if you are buying a new home.....then you can usually get a Realtor to rebate you some commission on the new purchase (I do) when they handle both of your transactions. We can try and bring in our own buyer for you....trickier, but with enough time...and you are in no rush.....that would also save commission costs for you.

Now....the homeless aspect...yikes, bad idea! One way I handle this with sellers is we list the home and accept offers subject to you finding a new home. It's backwards from what you might expect....but why not? Buyers will wait 4-6 monts for a short sale....we are asking them to wait a few weeks for you to find a new home....to buy or rent.

It's the puzzle....but if you'd like to take a bit more about it and get a better feel for my ideas, shoot me an email or give me a call and we can talk more.

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Bob Phillips, Agent, Rancho Santa Margarita, CA
Mon Dec 28, 2009
I'm not sure what not being a roach buyer is supposed to imply, but, using the figures you provided, if your present house is going to sell for $475,000., there are USUALLY costs associated with such a sale. Even with a reduced commission, when coupled with title and escrow fees, usually add up to about 5-7% of your sales price, as I mentioned. 6% of $475,000 is $28,500., which when deducted from $475,000., comes to a balance of $446,500., with which to pay off your $440,000. mortgage.

To then purchase a place for $300k, you would usually need at least 3.5% down - $10,500., PLUS closing costs for your purchase, as well, which, with lender's fees amount to another $4-7,000., so probably a need for at least $15k, just to purchase the next property. ( Which appears to exceed the amount you'll be receiving from your present house's sale.)

To me, given the numbers you provided, I just find it rather difficult to successfully massage the numbers needed to accomplish your goals - the reason I suggested renting your place out, rather than selling it, and then renting a smaller place, in the Kennedy District.

It REALLY all depends on the true value of your present home. ( And the integrity, or at least accuracy, of the source you're using for that figure.) Good luck in getting it all to happen according to your wishes.
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Murphy, Both Buyer And Seller, Buena Park, CA
Mon Dec 28, 2009
Glenn has the right answer. I am not some hurried and scurried roach borrower. I can make my payments and I have equity in my home. I will do what Glenn suggested.
Thanks Gents_
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Bob Phillips, Agent, Rancho Santa Margarita, CA
Mon Dec 28, 2009
Eric's first answer is quite accurate. In today's market you just might have ZERO equity left, after selling your house, either on a regular sale, paying closing costs, which average around 5 to 7%, OR, or a short sale, where the bank pays all the selling costs, but you walk away with nothing.

Here's another thought. Since we're pretty close to the bottom for your price range, why not keep your present house, and make it a rental? You can probably cover your payments by doing so.

What you WON'T be able to do is buy another house. ( Lenders won't lend to you on a new house, while you have no equity in your rental property.) Solution? Just rent a smaller house with a lower rental payment.

Your old house will eventually grow in value more than a smaller house - so, let the tenants make your payments, and sell it someday when the market gets better - which it always does.

Of course you could save all that trouble and just stay where you are. Have you tried to refinance to a lower payment?
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Eric Israel, Agent, Orange, CA
Mon Dec 28, 2009
The ultimate question is can you make payoff (including all closing costs and commissions) out of the sale of your home. You should interview at least 2 agents to review their marketing and advertising plans to sell your home along with the comparable market analysis of homes that have recently sold to determine if there is a chance the home could sell for your pay off plus costs. Otherwise, you would be looking at a short sale. What is a short sale? Click here to understand better: http://socaloceanviews.com/client_services.shtml .
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