Moxie Posted October 30, 2012 Share Posted October 30, 2012 Background-- We have a small home in a declining neighborhood. We were ready to sell it about a year and a half ago. At that time, we talked to a couple realtors and discovered that we won't get any money out of this house. We have spent the last 18 months saving up a down payment for a bigger/better home in a nicer area. We now have an acceptable down payment saved plus a little extra in case of emergency. We haven't committed to any realtor yet. We have found a decent house, in our price range, in a great neighborhood. There aren't many homes that meet our list of "wants" in our price range. This one is pretty close to perfect (not our dream house but acceptable). Person A in this marriage thinks we need to put this house on the market at the bottom price and hope the good house is still on the market when this one sells. The problem with this plan is that there are 7 people living in this small house. Keeping it "showable" will be really, really hard even after moving most stuff to storage (putting half the furniture in storage won't make living here any fun either--we won't all be able to sit in the same room at one time). Person B thinks we need to buy the good house and see if we can work out a deal with that realtor to sell our current home with a cheaper commission after we have moved out of it. The problems with this is 1) what if the current home doesn't sell and 2) we won't have a realtor looking out for our best interest on the purchase of the good house. Thoughts?? Is Person A too cautious? Is Person B too naive?? Person A is a Dave Ramsey fan and Person B thinks we need to think about what is best for our family in this situation. Please don't suggest a short-sale as that is not something we would do. Quote Link to comment Share on other sites More sharing options...
Michelle My Bell Posted October 30, 2012 Share Posted October 30, 2012 I am guessing that person A is your husband and person B is you. This seems to be a typical response because you have to deal with the discomfort of a home that doesn't work. I have been there MANY times. I think I would caution you to not get yourself into two mortgages no matter how much you want out of the situation. There is a clear logic to selling your house before trying to purchase another. You may feel that another house will not be out there when you are ready to buy, but I feel confident that it will not be the case. Protect yourself. You won't be happy if you are financially strapped. Quote Link to comment Share on other sites More sharing options...
momto3innc Posted October 30, 2012 Share Posted October 30, 2012 I'm with person A. I think there's just too many risks associated with holding two houses. At least it would be for us...not sure of your financial situation--maybe it would work for you. It is a pain to show a house and keep it nice. For sure. We have sold 3 and I really do get it. But, for a season, move stuff out, make the house look as nice as possible, and get it sold as quickly as possible. For me, the stress of waiting for the first house to sell would not be worth it. I'm sure others may feel differently. Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted October 30, 2012 Share Posted October 30, 2012 Person A in this marriage thinks we need to put this house on the market at the bottom price and hope the good house is still on the market when this one sells. The problem with this plan is that there are 7 people living in this small house. Keeping it "showable" will be really, really hard even after moving most stuff to storage (putting half the furniture in storage won't make living here any fun either--we won't all be able to sit in the same room at one time). Person B thinks we need to buy the good house and see if we can work out a deal with that realtor to sell our current home with a cheaper commission after we have moved out of it. The problems with this is 1) what if the current home doesn't sell and 2) we won't have a realtor looking out for our best interest on the purchase of the good house. How much is the mortgage on the current, small house (don't have to answer, but just wondering if it is large or small because you have been there a long time)? If I was comfortable continuing to cover it as it sat on the market awhile, I would buy the house and take the risk. If the mortgage is large on the current, small house and the monthly payment too large to cover realistically until at least spring, I would be wary. We are going into winter, so it is less likely it will sell. Don't worry about not having a Realtor on the house you located. An attorney can close that sale, and for thousands less. But you might want a Realtor if you think the Realtor can get you an even better deal. Have you looked at the comps? You might also consider going with the Listing Agent, because when the Listing Agent is getting commission on both sides of the deal, all of the sudden your offer sounds more palatable. I always go through the Listing agent when possible (but then I know how to do these deals and have experience). Quote Link to comment Share on other sites More sharing options...
dirty ethel rackham Posted October 30, 2012 Share Posted October 30, 2012 Sorry to Person B, but I would definitely go with selling the house first before committing to buying another. We tried buying a house before selling ours (we were trying to avoid 2 moves). We ended up owning 2 houses for 3 months. We were very fortunate that this was only a temporary hardship and we were able to swing it. But, I wouldn't do it again. Not in these uncertain economic times. I would probably rent a POD and start packing away anything not needed immediately. Quote Link to comment Share on other sites More sharing options...
Dobela Posted October 30, 2012 Share Posted October 30, 2012 If you aren't interested in renting the too small house, then I would wait until it sells. Quote Link to comment Share on other sites More sharing options...
Shelsi Posted October 30, 2012 Share Posted October 30, 2012 Unless you have enough in savings to cover the mortgage on your current home for at least 12 months and you're ok with losing all that money I'm with Person A Quote Link to comment Share on other sites More sharing options...
thescrappyhomeschooler Posted October 30, 2012 Share Posted October 30, 2012 As someone who has had two mortgages (along with rent for an aging relative) to pay at the same time, I'd have to side with person A. Although, I really, really, really understand Person B's point of view. Trying to show a house while still living in it with children is physically and mentally exhausting. I still think it's better than being stuck with 2 mortgage payments. Quote Link to comment Share on other sites More sharing options...
Moxie Posted October 30, 2012 Author Share Posted October 30, 2012 I am guessing that person A is your husband and person B is you. This seems to be a typical response because you have to deal with the discomfort of a home that doesn't work. I have been there MANY times. I think I would caution you to not get yourself into two mortgages no matter how much you want out of the situation. There is a clear logic to selling your house before trying to purchase another. You may feel that another house will not be out there when you are ready to buy, but I feel confident that it will not be the case. Protect yourself. You won't be happy if you are financially strapped. Guess I did a good job being impartial when I wrote this because I am Person A. Owning 2 houses, even for just a few months, makes me really nervous. OTOH, it would be so much easier to move this family only once and to sell this house without us in it. I really don't feel either option is 100% right, kwim? Quote Link to comment Share on other sites More sharing options...
SebastianCat Posted October 30, 2012 Share Posted October 30, 2012 We were in the exact same situation 3 years ago. We decided to sell our house but needed to do some work to get it ready to put on the market. We looked at and found a house that was very close to what we wanted. But, being cautious, we chose not to make an offer on that house until our 1st house sold. It took us 3-4 weeks to get our house ready to put on the market, and the house we wanted sold in that time. Once we put our house on the market, priced competitively, we had a contract within a week. We ended up renting for 6 months, because we then had a hard time finding another house we really liked, that wasn't a short sale. We did have a contract on a short sale for 3 months, but never got a response from the bank in that time, and found our current house and cancelled the contract on the short sale. Our current house is much nicer than all of the other houses - including the first house. It just took a while to get here. Even with all of that drama, I am still glad we waited until our house sold. Having two mortgages would have been very stressful, and the uncertainty would have been very difficult. I have a friend who recently (this year) bought a new house, then put her old house on the market. The old house was in a good neighborhood, move-in ready, in fantastic condition. It took 3 months to sell......much longer than she anticipated. They received several "lowball" offers, from people who wanted a move-in-ready house at a short sale price. They waited until they got an offer they thought was fair. But it was very stressful for her and her husband. Quote Link to comment Share on other sites More sharing options...
Shelsi Posted October 30, 2012 Share Posted October 30, 2012 I have a friend who recently (this year) bought a new house, then put her old house on the market. The old house was in a good neighborhood, move-in ready, in fantastic condition. It took 3 months to sell......much longer than she anticipated. They received several "lowball" offers, from people who wanted a move-in-ready house at a short sale price. They waited until they got an offer they thought was fair. But it was very stressful for her and her husband. That's somewhat like our selling situation except we didn't buy another house. Our house is in one of the most desirable neighborhoods in the city. There were tons of other similar houses up for sale in our neighborhood at the same time and they all sold within 2 months at or very close to list price. Ours took 6 months and 1 day to finally get an offer. Why? Because our realtor was awful. Terrible. Seriously bad. Of course she seemed awesome before we signed a contract with her and then it all went south & she wouldn't let us out of our contract with her. As soon as our contract was up we switched to a new realtor who sold it within the first 15 minutes she had it listed. I kid you not. Still it was extremely stressful since we had expected the house would sell in the average time frame which around here is 30-80 days, not 181 days. Quote Link to comment Share on other sites More sharing options...
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