Purchase & Sale of House/Condo Timing

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Coltrane75
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Joined: Wed Feb 06, 2019 2:32 pm

Purchase & Sale of House/Condo Timing

Post by Coltrane75 »

Hi all,
I own a condo in a downtown area and we're looking to purchase a single family home in the burbs.

Would it make more sense to focus to tilt the timing towards a focus on finding a home in the burbs faster than selling the condo? Or does it not matter?

I ask because it seems it would be better to err on the side of selling the condo late because a fall back could be to either rent out the condo for awhile (if sale of it is taking too long or I want to remove a contingency from my buy offer) or make double payments for a few months. The opposite scenario of selling too soon; we'd have to find a short term rental or live with relatives which seems more disruptive to me.

Thanks
quantAndHold
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Re: Purchase & Sale of House/Condo Timing

Post by quantAndHold »

It depends on the market. You do the harder one first.

If it’s a strong seller’s market that you are sure you can sell the condo, then find a place to buy first. Keep in mind that you might need to buy without any contingencies, so there is some risk.

If it’s a strong buyers market, then definitely sell first. You may not actually be able to sell for an acceptable price, so you need to make sure that happens before you start making offers.

In a more balanced market, you’ll probably want to sell first as well.
Yes, I’m really that pedantic.
123
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Re: Purchase & Sale of House/Condo Timing

Post by 123 »

Depending on your income it may be more difficult to obtain a loan on a new house if you are still paying off the condo. Difficulty could manifest itself in either a higher rate or a lower potential loan amount.
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Sandtrap
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Re: Purchase & Sale of House/Condo Timing

Post by Sandtrap »

Coltrane75 wrote: Mon Jan 20, 2020 2:20 pm Hi all,
I own a condo in a downtown area and we're looking to purchase a single family home in the burbs.

Would it make more sense to focus to tilt the timing towards a focus on finding a home in the burbs faster than selling the condo? Or does it not matter?

I ask because it seems it would be better to err on the side of selling the condo late because a fall back could be to either rent out the condo for awhile (if sale of it is taking too long or I want to remove a contingency from my buy offer) or make double payments for a few months. The opposite scenario of selling too soon; we'd have to find a short term rental or live with relatives which seems more disruptive to me.

Thanks
Based on the content and "tone" of your query. . . .
1. Would you be able to make "double mortgage payments" for a year?
2. Would you be willing to rent out your condo until it sells (meaning to a "tenant" with a contingent or short mo/mo lease)?
3. Would you qualify for a home mortgage while still owning the condo?
4. Buying a home contingent on selling something else as part of a transaction makes you a weak buyer. . .and vs vs. (really narrows your options).
5. Selling your condo and living in a short term rental is feasible to you?
It may be a better option.
Why?
Because it avoids all the disadvantages of #1-4. *(takes out all the "what if's" and "if only I'd have. . . . shucks".

j :D
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Watty
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Re: Purchase & Sale of House/Condo Timing

Post by Watty »

Everything is negotiable in real estate deals including closing dates and renting one place or the other until you can sell close on a sale.

Being able to move from one house straight to the next is not uncommon.

A lot of the stories that you may have heard about people keeping a condo as a rental happened during the 2008 housing crash when might might have owed $50K+(often a lot more) on a condo then they could sell it for so they decided to keep it as a rental so they would not have to bring a large check to closing to sell the house.

Sell the condo first even if there is a risk you might have to move twice. There is a huge risk is that your condo might take a lot longer to sell than expected or you may not get as much for it as you were hoping. Once you move out it will be obvious that you are not living there even if it is staged and prospective buyers will likely make lower offers and be more demanding because they know that you are a motivated seller.

You may see some figure like the average days to sell in your market is 30 day. Disregard that since it really does not mean a lot since housed that do not sell are not included in the figure, and houses that have been on the market a long time will often be taken off the market then relisted to make them seem like new listings.

Do not become an accidental landlord. Trying to sell a condo that is rented becomes a lot more difficult and you will likely need to spend a lot of money to refurbish it to get it ready to sell after it has been a rental for a year or more.
KATNYC
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Re: Purchase & Sale of House/Condo Timing

Post by KATNYC »

Sell first. Friends recently went through this and ended up paying two mortgages in two states (with a period of rent/mortgage). Their old house was an albatross. They had to reduce the price several times and it took at least a year to sell using multiple different brokers. At one point they considered making it an AirBnB. They were in the position to afford both mortgages with no hardship but it was still a headache.
Topic Author
Coltrane75
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Re: Purchase & Sale of House/Condo Timing

Post by Coltrane75 »

Thanks guys for your responses.

It does look like selling first is the best option. The downtown Boston condo market has been kind of moving sideways since 2017 so I'm not so confident that I'll be able to quickly sell it.

I'm going to talk to bankers now to see the available finance options. I'm also going to have to talk to the wife to make sure she's on board with potential of two moves & short-term rental.
stan1
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Re: Purchase & Sale of House/Condo Timing

Post by stan1 »

Remember the sales price of the condo is set by what a buyer agrees to pay for it, not by what the seller lists it for. In any market you can price a house to sell in under a month. One trap you can find yourself in arises if you ground on the condo being worth a certain amount because that's what you've put into it or that's what you need to move into the new house. The market could care less what you need to buy a new home or how much a remodel project cost. In my market sellers who list high often end up selling at a lower price many months later than if they had listed the property in line with comparable sales to begin with.
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