Selling & Buying a Home at the Same Time? It Can Be Much Like Juggling

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
http://activerain.com/droplet/59PF

 

 
Selling & Buying a Home at the Same Time?
It Can Be Much Like Juggling
 
 
The definition of juggling is ...  

A continuous tossing into the air and catching 
(of a number of objects) so as to keep a minimum 
of one in the air while handling the others ...
 
For those trying to sell a home while buying another,  it can feel just like that ... a juggling act requiring great timing, luck, balance, and concentration.

Back in the late 1970's when I was a rookie loan officer, the practice of selling and buying a home simultaneously was a fairly common practice.  Not so anymore.  

There are many reasons why this has become true, but one stands out most.  Available housing for sale is in short supply creating very competitive buying scenarios in many markets.  

In these competitive housing markets, Sales Contingencies won't cut it come Offer time.  Sellers typically won't consider Offers/Contracts that contain them.  They don't have to.
 
It's also true that the process of selling and or buying -financing a home is now more detailed too.  Many people are just not keen on "juggling" everything at once.  They prefer to consider, then learn, then tackle one step at a time.   
 
Those steps should include:  

  • Seek housing and financing counsel & advice
  • Sell their current home
  • Secure Mortgage Pre-Approval 
  • Search and find their new home
  • Sign a Contract to Buy

 

To assist them in accomplishing this, I, as their Mortgage Originator, must have a complete and thorough understanding of their financial/credit background and standing.  In the sell-and-buy scenario, there are additional questions and considerations (beyond the norm) that must be raised and discussed in order for my clients to make the most beneficial decisions for themselves moving forward.  

Some of those questions can be: 

  • How quickly are homes selling in their current home market?
  • What are comparable homes selling for in their area?
  • Does the market support a "Contingency Offer" being made on their   new home, should their current home not sell immediately?
  • What is the likelihood of that Contingency Offer being accepted by Buyers? 
  • What amount of equity do they hold (if any) in their current home?
  • If necessary, could they sustain TWO mortgage payments, should their home not sell?
  • How long could they sustain 2 home payments?
  • What is their personal comfort level with this possible scenario ... their "risk tolerance"?
  • What kind of cash reserves/savings do they have available?
  • If your current home sells prior to your finding a new one, do you have somewhere you can stay in the interim prior to Closing?  Rent, etc.? 
  • More ...

 

My focus as their LO must also remain on their education. It's very important for them to know the facts regarding all their financial options and the costs of selling and buying their home.  

 
It's at this point that I find many Home Sellers are surprised there are Seller's Costs involved in the sale of a home.  And specifically, what those Seller's Costs will total for them.
 
Costs that remain the responsibility of a Home Seller in the Chicagoland/IL area typically include:
  • Real Estate Commissions (if Agent(s) services utilized
  • Title Company expenses
  • Attorney Fees (if Attorney services utilized)
  • Contractual Items (if involved in Sale/Contract
       1.  Survey
       2.  Termite Inspection
       3.  Home Warranty Costs 
       4.  Home Inspection Repairs
       5.  Real Estate Transfer Taxes/Fees
 
  • Real Estate Tax Proration (owed to Home Buyers at the time of Closing
 
I'm sure other locations/states have other Sellers' costs that could be included in this list, but again ... these are costs often seen in the Chicagoland/IL housing market(s).  
 
Typical Seller Costs can range anywhere from 8% to 10% of the Contract Price ... and are dependent on the costs agreed upon in your specific transaction.  
 
Example:
 
Sales Price = $200,000
Typical 8% to 10% Seller's Costs = $16,000 to $20,000
 
So how do you calculate the Net Proceeds you'll realize from your home sale?
 
Example:  How to Figure Net Proceeds
 
Sales Price
- (minus)
Total Seller's Closing Costs 
- (minus)
Current Home's Mortgage Balance
= (equal)
 
Final Net Proceeds of Home Sale
 
 
The dollars represented by your Final Net Proceed represents the money available to you for your next home purchase (for Down Payment and Closing Costs). 
 
The above calculations, the menu of costs (both sales and purchase), the variety of possible sales/purchase scenarios and options, and need for information and sound advice ... reveal the vital importance of seeking and working with experienced professionals (both Mortgage and Real Estate).
 
My strong recommendation is:  Always seek that professional guidance and info PRIOR to taking any action regarding the sale of your current home or purchase of a new home.
 
To assist in your search for info, please consider reading my posts:
 
 
 
Bottomline:  Make sure you take the time to ask questions. Get fully-informed.  Then make your decisions.  You'll be glad you did. 
 

* When in need of Mortgage info or service when buying or refinancing a home in New Lenox - elsewhere in Chicagoland - IL & WI, contact me.  I'll be happy to put my 40+ years of mortgage experience and expertise hard to work on your behalf.  
I'm easily found at:
 
 
Gene Mundt
Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI Licensed
 
American Portfolio Mortgage Corp.
NMLS #175656
 
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
 
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

Email Me .. to be added to my Mortgage & Real Estate Newsletter

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Gabe Sanders 02/17/2018 11:50 PM
  2. Roy Kelley 04/09/2018 01:00 AM
  3. Gita Bantwal 02/28/2018 05:01 PM
Topic:
Home Selling
Location:
Illinois Will County New Lenox
Groups:
Realtors®
Mortgages
Chicago Area Real Estate BUZZ!
Buyer Information - What Buyers Need to Know in Today's Market
Bananatude

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Rainmaker
2,258,551
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This post is so clear and inviting. I remember decades ago (and some today) where you buy something and the instructions sail over your head. Not so here

Feb 07, 2018 04:42 PM #4
Rainmaker
90,355
Goran Utvic
606 Homes LLC | Chicagoland Brokers Inc, Chicago IL 60656 - Chicago, IL
We Buy & Sell Chicago Houses Fast

Excellent post Gene...I always recommend my clients to sell their house first then buy a house in Chicago. They really should get fully approved for a loan pending just the new home's appraisal only with a great lender like you.

Feb 07, 2018 04:53 PM #5
Ambassador
3,267,994
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Gene- it is clear from reading this that anyone thinking of buying and selling a home should have a meeting with a professional such as yourself. 

Feb 07, 2018 06:33 PM #6
Ambassador
3,551,711
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

Hi Gene

Buying and selling at the same time can be a major challenge, and unless you can afford to take on two mortgages it can become near impossible in some markets...and a particular challenge if moving a distance. Having thorough knowledge of the financial and practical issues in advance can make a big difference.

Jeff

Feb 07, 2018 09:46 PM #7
Ambassador
2,702,575
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Juggling caught my eye and after reading your post I'd say it's like juggling jello.  I do always get buyers who are also selling to make their purchase contingent upon the home they are selling closing.  But still even if it doesn't close  they are out the costs of so much. It's not my favorite kind of transaction and fortunately not all that common in my market which is primarily second homes. 

Feb 07, 2018 10:21 PM #8
Rainmaker
3,386,365
Dorie Dillard
Coldwell Banker United Realtors® ~ 512.346.1799 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good morning Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi ,

Glad to see your post featured. You are right when your buying and selling at the same time it can be a juggling act but can be done when everyone is keeping their eyes on those balls!

Feb 08, 2018 04:09 AM #9
Rainmaker
1,861,774
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Good points Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi and bridge loans. When you set it up I find often the home sells and you don't actually need one. That 6 to 8 weeks in the lull from under contract to buying the new house can be time well spent marketing, getting offers, selling your old castle.

Feb 08, 2018 04:18 AM #10
Rainmaker
4,199,102
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

This is not an easy task, but it can be done, with the advice and assistance of professionals.

Feb 08, 2018 04:23 AM #11
Rainmaker
2,614,220
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

It sure can Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi and i see it very often with move up buyers as they need to sell their home to move, yet they need to find a new home to want to sell their home. 

Feb 08, 2018 05:28 AM #12
Rainmaker
2,347,744
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

HI Gene... working on just such a transaction right now... and I do one of those at least once each year if not more often. I've found if we put together a good plan of attack upfront, things have a way of coming together.

Feb 08, 2018 09:07 AM #13
Rainmaker
594,402
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

That's a great post Gene as this is reality real estate. A regular occurrence. You inspired me to write about this in my client newsletter....  

Feb 08, 2018 09:21 AM #14
Ambassador
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Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Hi Gene, sage advice again. You have explained the juggling act very well. It can be quite an exciting ride, but with the right Realtors and lender team, the bumps are rarely noticed. D 

Feb 08, 2018 09:31 AM #15
Rainmaker
1,956,021
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Something I am certainly familiar with.

Our first home was a new build and we were renters and had to give up our lease before it was finished. We had to live with my in-laws for a short period of time.

Our second home was also a new build, but this time we had a home to sell and juggling the timing of that was very interesting to say the least. We were very lucky that we closed on both houses on the same day and it went very smoothly.

Our third and current home was purchased a week before my husband quit his job and we hadn't sold our second home yet. We carried two mortgages for two months.

We are now looking to move again and this time hope to find Home #4 as cash buyers so we buy before we sell. Fingers crossed! 

It's always interesting!

Feb 08, 2018 01:07 PM #16
Rainmaker
436,035
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Specializing in Brookside, Waldo, Prairie Village

This is the very first step when thinking of buying a home--especially in this hot market when the buyers have to sell a house first.  Lenders have to have options to help out sellers/buyers manuever the financing.

Feb 08, 2018 05:40 PM #17
Rainmaker
2,671,942
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Gene I have done it a few times and you should see how I picked up gray hair by the bushels every time:))  one transaction was connected, I represented the seller who bought a property and the seller on that property bought another home out of state and our first buyer flaked... need I say more:))Endre

Feb 08, 2018 10:28 PM #18
Rainer
401,889
Dörte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Gene,

Very true. Always calculate where you want to end up before starting on the journey. Being well-prepared may actually let you get there.

Feb 10, 2018 12:30 PM #19
Rainer
122,438
Shahar Hillel
Augusta Financial Inc. - Stevenson Ranch, CA
Mortgage Consultant, Loan Officer.

Gene hello.

Great post.

This is the truth and a professional guidance can make all the difference.

 

Feb 12, 2018 03:39 PM #20
Rainmaker
4,553,867
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Congratulations on your feature recognition. This is great advice to share.

Feb 18, 2018 05:23 AM #21
Ambassador
2,480,979
Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

I swear, I have more of these than any transactions in the past 3 years! Sellers are afraid that they'll have to move twice (since inventory is so low - they're afraid they won't be able to find the next home). So, prepartation is key to having this flow into one seamless transaction. It's more prep time but, gosh, SO worth the smooth double-Closings in the end and avoiding having to move twice, Gene!

Happy Monday!

 

Feb 26, 2018 07:42 PM #22
Rainmaker
2,733,122
Sally K. & David L. Hanson
Keller Williams 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce - Short Sale

This is an art well practiced by agents with experience and should only be done with experienced agents.

Apr 09, 2018 04:26 AM #23
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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