August buying advice: How to juggle listing and looking at the same time
Here are some tips on multitasking as you're moving up, as well as a look at whether buyers without kids should buy in a good school district.
For many move-up buyers, sliding prices have been only one stumbling block to trading up to a larger home. Managing the process and expenses associated with listing your home while looking for another is far from easy, especially in today's market. We'll look at options and strategies for managing this tricky process, review the latest housing stats and consider whether people without kids should consider paying for a house in a good school district.
Managing the move-up
So you've held off as long as you could in your current home trying to ride out the stagnant housing market. But the time has come and you simply must relocate, expand or get that yard for your young kids.
How do you handle selling your existing house and looking for a new one without tearing out your hair? Planning is key, agents and mortgage brokers say.
The first step, says Floyd Walters of BWA Mortgage in La Canada, Calif., is making sure your credit record is as spotless as it can be. He advises pulling your credit report and meeting with your lender six months before you're ready to list and buy, so you have time to pay down debt, correct any errors and generally polish your score. "You can't do that when you're in escrow" on your house, he says.
Talk with a lender or broker about what you think you can realistically get for your house, and determine what you will be left with after paying commissions. You can also look at what you might consider adding to that amount from your savings and 401(k) if you think it's prudent.
Article continues below
If you don't have much equity or are underwater, but have money in savings, you might consider renting out your existing house until the market improves, and going with a lower-down-payment buy on the move-up, says Gary Balanoff, broker/owner of Re/Max Select in Orlando, Fla.
- MSN Money: Annoying homebuying fees to avoid
"The spread on what you make on rentals is pretty good," he says, at least in his area. "It gives [move-up buyers] positive cash flow to afford more house on the other side." It's worth noting, however, that if you don't put down 20% on the purchase, you'll be paying private mortgage insurance.
For those not taking on the landlord role, the next move is finding a listing agent for your existing home.
You'll want to pick one who has a lot of experience selling in your area and who plans to market your home extensively. Don't be afraid to ask for his sales record, including statistics for each such as days on the market and what these houses sold for in relation to their initial list price. You want your house to sell quickly and garner the price it deserves.
Talk to your new listing agent about your options for listing, showing and negotiating the sale of your home:
- Could you take a long weekend with the dog and kids and hold the house open for brokers and buyers both weekend days to get started?
- Would it be worth it to put a good portion of your furniture, collectibles, toys and other belongings in storage? It might be, if it would make it easier to spruce up before an agent would like to show it.
- Next, talk about your options for choosing an offer. Hopefully, by this time you have singled out a neighborhood you like and maybe even a couple of houses that meet your budget.
If you bid on a house before your sale closes, you will need a contingency in that purchase contract that stipulates that your house must close first, Balanoff says. You'll also need a seller willing to accept that contingency. Otherwise, you might consider accepting offer on your current home that gives you 60 days to close, or allows you to rent back the property for a month or two from the buyer so you have time to find your next home — or at the very least find a good rental until you find your dream home. It's worth a try anyway, agents say.
But most important, agents say, is setting a realistic price for your home right out of the gate. So many sellers, Balanoff says, price their house higher, only to have it languish on the market and eventually sell beneath what their agent initially proposed anyway. Don't prolong the process, trying to wring out every penny. Then find a good buyers agent to work with on your purchase.
Move on and move up.
Don't even suggest to people that they take money out of a 401K to buy a house. If you don't have the downpayment, you're not saving enough. Maybe that means you can't afford the more expensive home.
Robbing your future retirement money to buy a house today is akin to the problems America is having now. We stole from the future to pay today's bills.
Only a realtor will benefit from your tapping into your 401K.
29% + 31% + 50% does not equal 100%.
Therefore, that tells me the whole article is a sham.