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

Reblogger Gita Bantwal
Real Estate Agent with RE/MAX Centre Realtors

This is a great post by Gene Mundt.. If you are thinking of buying a home and selling your current home you should talk to a lender first. Most sellers may not consider a home sale contingency in this market. 

 

 
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
 

  

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   

   Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender  

    

 

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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Rainmaker
4,247,044
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for the re-blog Gita.  This is a type of transaction that many of us are dealing with more often these days.

Mar 01, 2018 04:32 AM #1
Rainmaker
4,601,363
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Thank you very much, Gita, for sharing this excellent reblog selection.

Mar 01, 2018 05:34 AM #2
Rainmaker
3,995,736
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Gabe, thank you.

Mar 01, 2018 07:03 AM #3
Rainmaker
3,995,736
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Roy, thank you.

Mar 01, 2018 07:03 AM #4
Rainmaker
2,570,026
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I never thought of that metaphor of juggling, but I guess it works quite well in this scenario! Nice work! :)

Mar 02, 2018 02:58 AM #5
Rainmaker
3,995,736
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Laura, I agreeGeorge wrote a great post.

Mar 02, 2018 03:39 AM #6
Rainmaker
944,748
Carol Williams
U.S.: I specialize in helping agents who have been in the business 2 years or less create a thriving business. - Wenatchee, WA
"Customized Mentoring & Marketing Services"

Hi Gita,
This is a great choice for a reblog.  Gene outlines an excellent case for having professionals help through the process. 

Mar 03, 2018 05:55 AM #7
Rainmaker
3,995,736
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Carol, thank you.

Mar 03, 2018 10:26 AM #8
Rainmaker
556,558
Carla Freund
Keller Williams Preferred Realty - Apex, NC
Raleigh - Cary Triangle Real Estate 919-602-8489

Gita Bantwal this is a great re-blog. It can be a juggling act when you're both selling and buying a home. This is especially true if you have to close on your sale to make your purchase.

Mar 03, 2018 12:26 PM #9
Rainmaker
3,995,736
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Carla, thank you for reading

Mar 03, 2018 03:07 PM #10
Rainmaker
1,146,579
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Appreciate you sharing this post with your readers, Gita Bantwal ... thank you!  Hope the message proves beneficial to all ...

Gene

Mar 07, 2018 10:12 AM #11
Rainmaker
3,995,736
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Gene, thank you for the opportunity 

Mar 07, 2018 01:10 PM #12
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Rainmaker
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Gita Bantwal

REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel
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