We currently have our 3 bed/1 bath full basement home for sale in Wonder Lake, IL. It has a fenced, large, wooded yard. It's been on the market for about 1 month and is very competitively priced. However I know the market is BAD right now. My question is this, we have found a home we like that can be built in about 5-6 months. Do we put the earnest money up to get it started or just wait?
2006-10-03 03:33:53 · 14 answers · asked by Heather 1 in Business & Finance ➔ Renting & Real Estate
I think one major question you have to figure out the answer to, is how long can you go with it on the market? If you put up the earnest money for the new housed and find that if you don't sell the old house within the next month you can't afford the note anymore, I would say that's a little risky. Maybe I'm overly conservative, but I would like a little more room to work with. If it were me, I would anticipate - on the high end - my house being on the market for anywhere from 6 - 12 months.
2006-10-03 03:39:05 · answer #1 · answered by RedneckBarn 5 · 0⤊ 0⤋
I would wait to see if you house gets any bites. What you think is competitivel priced and what buyers think are two different things. We are in the same boat...we have had our house on the market for 3 months and have already committed to the new house. We are in the hole for 50K and the new house will be ready in December. We have not gotten any bites from any buyers and have lowered the price 3 times. Now we are dangerousely close to loosing money in this deal. Your market may be different, however. If people are looking at it and not offering, the price is too high. The bottom line is ...don't do anything that you will not be able to afford. Good luck! I hope it works out better for you than it has been working out for us!
2006-10-03 04:27:17 · answer #2 · answered by ShopGirl 1 · 0⤊ 0⤋
You will always be able to find a house that you would like to build. The housing market's downtrend began only a year ago, meaning that it probably will be sluggish for several more years.
In the meantime, builders will add more incentives (as they have already) to try to lure you to buy.
The sale of your current home is the key. Whether you can maintain two mortgages (which most people can't and shouldn't) is the number-one question.
2006-10-03 03:43:22 · answer #3 · answered by Coffeyvillian 3 · 0⤊ 0⤋
The real risk is that if you go ahead and deposit earnest money on the new house you will either lose the money if you can't get out of the contract or you put yourself in a position where you have to pay for two properties.
I would suggest investigating the rental of your existing house. Can you get enough of a monthly rental to carry the monthly paymets. If you can get more great, if this would fall short can you still afford to carry shortfall.
2006-10-03 03:49:56 · answer #4 · answered by waggy_33 6 · 0⤊ 0⤋
You can put a contingency clause in the contract with the builder that you have to sell your existing home before taking possession of the next one.
The obvious advantage is to keep you from paying two mortgages (assuming that is beyond your ability). The drawback is if another buyer wants the same house you are building and they have no contingency clause, you will have to lift your contingency or forfeit the purchase.
2006-10-03 03:55:20 · answer #5 · answered by galactic_man_of_leisure 4 · 0⤊ 0⤋
Yes, in order to tie up the property you are interested in you will need to make an earnest money deposit and may have to obtain the financing before the builder will start on the home, if he is not building on his own building line of credit.
The good news is that I can offer you an advance on the equity you have in your current home in order to do so. My bank offers what is called a Departure Home Equity Line Of Credit on home that are listed for sale. Subject to your qualifying for financing, we will advance you up to 90% of your home's lendable equity on a line of credit that is payable on interest only payments for up to one year. The rate will be determined by your credit score and the loan to value requested. The base rate is the prime rate of interest. You can pay it in full when you sell your home. In addition, I can offer you a one time close construction loan that will preclude your need to obtain two separate loans for the construction and the permanenet loan on your new home. In addition, I will give you the Departure Home Equity Loan at no cost if you will commit to me on the one timne close loan for construction of your new home.
I work for a national bank (not a .com) and can loan in your state. Our rates are competetive and service is excellent. I've been a mortgage lender for more than 20 years. I do a great deal of my business now via fax and email so this is nothing new to me. My email is Nlabonte@firsthorizon.com. firsthorizonusa.com/nancylabont is my website. I'd be happy to answer any questions you may have, pre-approve you for the financing, and explain the process in detail at no charge
2006-10-03 03:58:43 · answer #6 · answered by Anonymous · 0⤊ 0⤋
if you need the monies from the sale of your current house for the new house, do not take on new liability until your old house is sold, not under contract
while their is not an extreme housing bubble, their is a slow down houses are sitting longer , look around your area how many houses are for sale? how long have they been on the market? it may take awhile for you to sell the old house and you may have to lower the price
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2016-10-18 10:05:33 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Personally, I would wait because if you gamble and your house does not sell, you would be paying two mortgages and could wind up losing one of your homes if it sat on the market too long.
2006-10-03 03:43:39 · answer #9 · answered by RKC 3 · 0⤊ 0⤋
if you can afford it go for it, if not wait and sell first.
competitively price means what to you ?
same price like the 20 other homes in the neighborhood? a little above ? below ? if you want to sell, list it at $30,000 under everyone else and see who takes the bait - real estate is like fishing
2006-10-03 03:49:47 · answer #10 · answered by Anonymous · 0⤊ 0⤋