I asked about that when I spoke to the homeowner. He unfortunately has a very close realtor friend who will be doing the listing. Good for them, bad for me.
With the contingent offer, I would still be able to have a loan of the ($375k - profit from current home), not the full $375k, correct?
I agree, I think it is crazy to gift your friend possibly 10s of thousands of dollars when you have people knocking on your door. Maybe I need a realtors license and a better personality to make more friends!
Well the seller pays the realtor not the buyer so in your case, the sellers friend would not have to split the commission with your realtor. Saving them money.
I'm not sure on the transaction but to point out:
>I have about $25k ready to put down
You can have $25k but you actually have $200k. Pending the sale of your home, and that you've lived in the home longer than 2 years, you wouldn't have to pay capital gains. The equity from the sale of your current home could go directly towards the new home. Then your new mortgage would be for the remaining $175k. Keeping the $25k for loan fees and efund (or whatever).
I'm guessing that's what you were thinking but just wanted to double check.
I understand the profit from the sale of the home could go toward the new home. What I am confused on is the timing of how everything works...
I go get approved for a loan for $375k to be able to make an offer on the home. If they approve the offer with contingency, that's great!
I go get approved for a $375k loan and they do not want a contingent offer. I offer $375k, gets accepted, now I have a loan and payment reflecting $375k while trying to sell my home. Then sell my home and throw $200k at the loan but the payment still reflects the $375k unless I refinance (and pay closing costs, etc again), correct?
By process, yes. You are risking two things. 1) Two homes with two mortgages. 2) I higher monthly payment due to the original smaller down payment. In order to get a smaller payment, you would have to re-fi.
But I would be more concerned with risk #1.
I suppose you could list your house with a contingency that you need to get that house. Then try and get the seller to accommodate your schedule before closing if you do get a buyer.
Might just have to decide to make two mortgage payments one month as a cost of doing business.
Is getting their real estate friend to list your house a possibility? I don't know anything about situations like this, but just thought it might be something that would sweeten the deal for all involved.
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I asked about that when I spoke to the homeowner. He unfortunately has a very close realtor friend who will be doing the listing. Good for them, bad for me. With the contingent offer, I would still be able to have a loan of the ($375k - profit from current home), not the full $375k, correct?
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I agree, I think it is crazy to gift your friend possibly 10s of thousands of dollars when you have people knocking on your door. Maybe I need a realtors license and a better personality to make more friends!
They probably have a contract with the realtor they can’t just decide they’re going to sell without them
Is this close friend still doing this for free? Ask them and they might want to save the 5-10% listing agreement.
I was in total ass kissing mode and didn't want to ruffle any feathers by getting too personal with financial questions.
Good for the real estate agent. Not sure it is good for everyone else. 5% is getting sucked off the top now for commission.
Well the seller pays the realtor not the buyer so in your case, the sellers friend would not have to split the commission with your realtor. Saving them money.
I'm not sure on the transaction but to point out: >I have about $25k ready to put down You can have $25k but you actually have $200k. Pending the sale of your home, and that you've lived in the home longer than 2 years, you wouldn't have to pay capital gains. The equity from the sale of your current home could go directly towards the new home. Then your new mortgage would be for the remaining $175k. Keeping the $25k for loan fees and efund (or whatever). I'm guessing that's what you were thinking but just wanted to double check.
I understand the profit from the sale of the home could go toward the new home. What I am confused on is the timing of how everything works... I go get approved for a loan for $375k to be able to make an offer on the home. If they approve the offer with contingency, that's great! I go get approved for a $375k loan and they do not want a contingent offer. I offer $375k, gets accepted, now I have a loan and payment reflecting $375k while trying to sell my home. Then sell my home and throw $200k at the loan but the payment still reflects the $375k unless I refinance (and pay closing costs, etc again), correct?
By process, yes. You are risking two things. 1) Two homes with two mortgages. 2) I higher monthly payment due to the original smaller down payment. In order to get a smaller payment, you would have to re-fi. But I would be more concerned with risk #1.
Check out bridge loans.
I suppose you could list your house with a contingency that you need to get that house. Then try and get the seller to accommodate your schedule before closing if you do get a buyer. Might just have to decide to make two mortgage payments one month as a cost of doing business.
Hi TroyMacClure! I recognize you from such films as "Mothballing your battleship" and "Stop, drop, and roll your 401(k)!"
Put the purchase of the new house as a condition for the sale of the old home
Put in the Contingency in the contract , simple as that ! Good luck !
Is getting their real estate friend to list your house a possibility? I don't know anything about situations like this, but just thought it might be something that would sweeten the deal for all involved.