if selling three homes to buy one do i need to sell all three first before i choose the home i want or is creative financing for my situation?

Asked by Paul, Williamstown, NJ Sat Nov 20, 2010

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, ,
Sat Nov 20, 2010
There are some possibilities, it all depends on your situation, and what you are looking for rate-wise. Also, are they all either owner-occupied or second homes, or were they used as investment properties. The question is a bit open-ended to figure out. If you have loans on all 3 homes, but can qualify, you can purchase something without selling all of them, as long as you have the right income and assets to cover.
However, I have one thing to say, which some may know the true answer for, although you should definitely consult an attorney. Someone told me that you cannot enter into a contract in NJ if you have something else to sell. I will admit this was from a client who sometimes didn't get everything exactly right, and sounds a little odd to me, but I would check it out anyway.
1 vote
Jeanne Feeni…, Agent, Basking Ridge, NJ
Sun Nov 21, 2010
I have to agree Paul that your best bet is to discuss with a lender who can advise you on your options. Anything short of that is really just guessing - bank requirements are more stringent than they have been for some time. it is essential that you have a plan, particularly with as many moving parts as you describe.

Trulia is a great place to find resources - if you don't have a lender, I'd talk to Robin.

Jeanne Feenick
Unwavering Commitment to Service
Web Reference:  http://www.feenick.com
0 votes
Diane Glander, Agent, Spring Lake, NJ
Sun Nov 21, 2010
Only a lender who can look at your whole financial picture can give you an answer to your question. If you can financially qualify, you won't have to sell anything. However, remember that being able to qualify and being comfortable carrying another property are two different things.
Web Reference:  http://www.dianeglander.com
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, ,
Sun Nov 21, 2010
Paul, not knowing your income, or other debt you may have, the information you gave is not enough to determine what you can qualify for. It is also possible that all of them don't have to sell before you buy. The other question is what you want to buy, and what kind of mortgage you want to get on that.
If you would like to contact me, I would be happy to go over all of your information and come up with the best solution. You can contact me through my profile. I am licensed in New Jersey.
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Larry Sarlo, Agent, North Wildwood, NJ
Sat Nov 20, 2010
You situation is difficult although not unique.
Your answer here would greatly depend on want you have to do in order to buy another home.

Do you need the money in order to purchase?

Are the other homes financed?

Are they all main residences or rental units? Sometimes I get kids wanting to move into a home with their parents. Each have a home to sell... There is not enough space here to or time to provide this answer. it is not a quick answer or fix.

Qualifying for a home purchase means either having the cash to buy it outright or the ability to finance your purchase... It has to be determined what your situation is and then how to get what you need done.

Sometimes holding out for a sale of a home becomes a stressful situation. Most of it is making sure it is priced right and marketed right.

As far a creative financing, I've seen this revolution around in several decades. I see no reason to provide financing on your home to another since interest rates are so low. Mostly creative financing comes into our market when interest rates are high. The other scenario are difficult market areas such as summer homes in season areas. Typically they are second homes but still you run the difficulty in qualifying a buyer. Where most banks would not consider a buyer for your seasonal home, you may make the decison they are credit worthy. Your upper hand is being able to charge a higher interest rate, but now it becomes a little less affordable for that buyer...
In this market we have 2 devil's advocates to consider. Dangerous qualification ability of purchasers and your profit. Down payment, incomes and credit worthiness is so important when holding paper. It is something you will need to speak with an attorney about and your tax professional. Their advise here is more important. My advise it is not to market for holding a mortgage.
You certainly have opportunities to sell homes today. We are typically in a slow part of the season right now. But I have seen increased activity in our area lately with 3 contracts this week alone and another coming in next week.

Larry Sarlo
Weichert Realtors Turnersville
Web Reference:  http://www.njhomehunter.com
0 votes
., , Tranquil Place, Carefree, AZ
Sat Nov 20, 2010
This could be a complicated answer that can not be fully explained in this space. You should talk to someone on the phone or in person where all the details and possibilities can be discussed. I would be happy to talk to you with no obligation on your end. "Creative" financing has different meanings to different people. Depending on your income and mortgage terms, it is possible you don't have to sell any of the 3 homes before buying another. However, it doesn't seem that you want that possibility even if you could. It is usually better to have your home on the market when looking at other homes. That way you show you are serious to the home owner who's home you wish to purchase. The most ideal situation for a home seller is a buyer with no home to sell. Would you consider taking your home off the market for a buyer that did not at least have their hoe for sale? You mentioned 1 of the homes has no mortgage and a shore home only has a $40,000 mortgage, so you could take out home equity loans, but that might make your ratios impossible for a new loan. As I said at the start, there are many options, but only through a dialogue back and forth can we determine the best course of action for YOU!
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Jerry Barker, Agent, Atlantic City, NJ
Sat Nov 20, 2010
You may want to look into doing a 1031 exchange, it might make things a little easier for you and may prevent you from having to pay capitol gains tax on the properties your selling.
Web Reference:  http://www.sjratesc.om
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Mary Petti, Agent, Edison, NJ
Sat Nov 20, 2010

You said <Someone told me that you cannot enter into a contract in NJ if you have something else to sell. I will admit this was from a client who sometimes didn't get everything exactly right, and sounds a little odd to me, but I would check it out anyway.>

That is not true. It's not that you can't , it's that you probalby won't be able to.

Many sellers will not enter into a contract if the buyers homes is not under contract, sold outright, or at least on the market. Unless the buyer has some other means of financing the down payment (not from proceeds of their home sale), and can obtain a mortgage and/ or can carry two mortgages until their home sells, a seller, especially in this market will not take their home off the market for a buyer who has no money until their homes closes.

Some relocation companies, and especially banks when it's a short sale, will not allow a sales contingency.
0 votes
Paul, Home Buyer, Williamstown, NJ
Sat Nov 20, 2010
two are owner occupied one is second home, two are in n.j. one is in pa. one home is in n.j. is no mortgage second home in n.j. is shore home with 40,000 mortgaged. pa. home is 140,000 mortgaged there is plenty of equity.
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Bernard Teic…, Agent, Freehold, NJ
Sat Nov 20, 2010
Hi: Ask your banker regarding creative financing. As to, what I believe would be an offer to purchase with a contingency on the sale of your 3 properties, this is something you may want to explore with your agent - that is selling them for you.

Best wishes
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