Really basic real estate question

[kalanamak]

I hate to call an agent and get on their "list", and I can't count on an answer that is not to their benefit.

 

If one owns a house, how, short of saving for 10 years, does one afford a down payment on a new one AND the money needed to get the owned one ready for resale. Or does one fix it up, sell, and then hurriedly move into whatever one finds or just rent while you hunt.

 

I don't move much, and I've never owned a house outright before. I suspect I'm missing something basic a lot of you already know.....

[Sunny]

Typically, one puts up their house for sale and then starts looking for the one they want. If they find a house before they sell their house, they put an offer that is "contingent" upon the sale of their house. That way,they close together, meaning that the proceeds from your sale get deposited into the escrow for the purchase of your new home.

 

That's the way it used to work.

In this economy, I believe many people are not accepting a contingency because the chance of the sale of your home is pretty remote.

However, you can always work out an agreement that they can continue to list their home for sale and then give you 24 hrs. to come up with the money outside of the sale of your home.

We ended up having to do this, and borrowed against the equity of a family member's house to get the loan for the new house. We paid it off when the sale of our house finalized.

 

Sometimes in a bad economy it can go either way. The sellers can get real flexible, hoping they can get the sale that otherwise may not sell, or they may not want to "tie it up" in a contingent situation.

Main thing is:

1. get your house ready for sale. Get it decluttered and fixed up. Then call a realtor and get it listed.

2. then you can start looking for a house, but don't get too set on just one. You'd be better if you waited until you had a buyer. You could probably negotiate a pretty good price on a house if you came in with an offer to buy in 30 days at the closing of your house (already in escrow).

 

If you end up selling your house, you can always ask if you can rent it back for a month or so until you get your new house. It is more expensive that way, but better than moving twice. The people that were buying our house had moved in with their folks for 6 months to save money for the move.

You just need to decide how badly you want what you want!

[Sharon H in IL]

A lot of people borrow money from relatives, but a deal contingent on the buyer's house selling is very common.

 

Sweat equity is the best way to fix up a house for sale. Things you would have to hire a pro to do can be taken into account when you set the sale price. For example, if your house needs a new roof, you price it to reflect the buyer's cost to replace the roof.

 

Curb appeal and cleanliness often make the difference between a drive-by (someone who sees the house is for sale but is turned off and doesn't stop to look inside) and an offer on a fixer-upper.

[texascamps]

Firstly, I am a real estate agent and would suggest you contact a real estate agent. By law we are required, if we are working for you, to put your best interests first and try to get the best deal we can for you. We must be lawful and give the best advice we can on helping you make good real estate purchase and sales decisions.

 

I have a short list of lenders that I refer folks, because they have served my clients well in the past and close on time. I do not get any kickbacks or referral fees from those lenders, that is illegal.

 

 

It is okay to interview agents. I pick up clients through referrals and by doing open houses. People often shop for agents by going to open houses and finding that personality that fits what they think they want. They should be able to give you a list of homes that have closed recently and comparisons to your home.

 

My biggest asset is my ability to help you stage your home and make suggestions that will make your home stand out. So, that is where the agent interview comes in, finding the agent that will best sell your home. I have a long list of things I will absolutely do right away and a list of what I do if it doesn't sell in 4 weeks, 2 months. etc.

 

Depending on your state, we agents want you to sign a listing contract with us which protects us from doing a lot of work and spending a lot of money, just to have the client turn around and buys and sell around us. When I market a property, I can expect to spend about 1% of my compensation on the marketing, flyers, postcards, print ads and MLS fees.

 

So, instead of thinking the Agent has the power, realize that by law you are the one in control. Just ask a lot of questions and read through a contract to make sure you understand what you are singing.

 

I think having a good agent is like having a good mechanic, doctor, dentist etc. I have clients that I'm in contact with that won't need me again for years, but they should know their market.

 

Oh, and an agent will be able to give you a ballpark figure as to what you will net from the sale of your house. While it is for sale, you can still get approved for a loan based on the amount of money you will net from the sale as a down payment for your next property. Then, you can begin looking, even while your home is for sale. If, for some reason, the price drops then you deal with your agent and lender to change the numbers.

 

Its also a myth that you can get a better deal on a house if you call the listing agent of that house. Since we sign a contract with the seller, we are required to give the owner of the house/seller the best deal we can, we have no requirement to give a buyer that calls us on our listing, the best deal.

 

Good Luck!

 

And don't be afraid to aske questions. You owe an agent nothing until you sign something! At least in my state:tongue_smilie: