Of all the reasons home owners give for choosing to stay in their current home — even though they might like to move — the most perplexing is the question of, “Where would I go?”
Sellers realize that even though they may get a terrific price for their home, they will then become a buyer — a less enviable postion in the current real estate market.
Where would you go? Here are some potential answers to that question:
> Downsize: If your family is no longer growing, the money from the sale of your current home may enable you to purchase a smaller with upgraded features and/or in a more desirable location.
> Rent (temporarily): Plan to move to a short-term (3-6 months) rental once the sale of your home closes. Moving twice isn’t ideal, but it can be a good alternative to making a hasty purchase.
> Stay with friends or family: You may have friends of relatives with a Mother-in-Law apartment or empty finished basement. Pay them a reasonable rent so everybody benefits.
> Consider “Extended Stay”: Many “name brand” hotel chains offer this option.
> Consider “Lease to With Option to Buy”: One company that offers such a program is Home Partners of America. (homepartners.com). In a nutshell, you identify a house you want to buy. Home Partners buys the house and rents it to you at market rates. You have five years to decide if you want to buy it from them.
> “Rent Back” from Buyers: Make an agreement with the buyers of your home, that you will be allowed to stay and rent it from them for a pre-determined length of time after closing (usually 2-3 months) while you look for your new home.
> Buy Contingent: Find a seller who is willing to accept an offer that is contingent on the sale of your home. This is rare in this market, but I’ve been successful in negotiating such purchases for my clients. I can do the same for you.
> Get Creative: The options I’ve outlined here are not the only possibilities. Unique circumstances often give birth to creative solutions. Call me today to discuss your situation and let’s work together to achielve your dreams. 206-708-9800
If you are thinking of buying a house, but waiting for the home prices to stop climbing, you may as well hunker down.
Recent statistics from the FHFA (Federal Housing Finance Agency) show that although home prices were expected to slow by the end of last summer, they have now risen for 17 consecutive quarters. Nationwide, the increase in August averaged 8%, rather than the 3 to 5 percent economists had predicted.
“The long-anticipated slowdown in home price appreciation did not occur in the third quarter,” said FHFA Principal Economist Andrew Leventis. “The factors that have contributed to extraordinary price growth over the last few years — low interest rates, tight inventories, strong buyer confidence, and improving income growth — continued to drive prices upward in much of the country. However, as prices continue to rise, reduced affordability will be a stronger market headwind,” Leventis said.
Translation? It means that the old adage “time is money” is truer than ever. The longer you wait to purchase a home, the less buying power you will have unless your income increases at a faster clip than home prices. When home mortgage interest rates rise (rumor has it that the Federal Reserve Board has an itchy trigger finger), your buying power will shrink even further.
So if you are serious about wanting to buy a home in the coming 3 to 6 months, your best move is to find a skilled real estate broker (that would be me, 206-708-9800) who can point you to a reputable lender, who can then get you pre-approved for a home loan.
Once you know how much you qualify for, we can get to work finding you a home.
Are you thinking about buying a home? Wondering about how to get started with the whole process?
The first thing you should do is talk to an experienced, trustworthy lender (aka loan officer) to get an accurate assessment of your credit status and financial fitness. A loan officer will help you determine the amount of money you can qualify to borrow, i.e. how much house you can afford.
How and where do you find a trustworthy lender? I recommend you devote a little time to this task because your choice can either save or cost you a lot of money when buying a home!
If you don’t already have a lender you trust, ask friends and family for recommendations. Real estate agents are also a great source for referrals as we work with lenders all the time and can easily identify and recommend several loan officers who have a good track record for helping our clients successfully buy a home.
Next, spend a little more time interviewing two or three lenders until you find one who fills you with confidence in his/her skills and ethics.
Here are 10 Questions to Ask when interviewing a loan officer.
- What are the most popular mortgage loans you offer?
- Which type of mortgage plan do you think would be best for us? Why?
- Are your rates, terms, fees, and closing costs negotiable? How do you get paid?
- Will I have to buy private mortgage insurance? If so how much will it cost and how long will it be required? NOTE: Private mortgage insurance usually is required if you make less than a 20 percent downpayment, but most lenders will let you discontinue the policy when you’ve acquired a certain amount of equity by paying down the loan.
- Who will service the loan? Your bank or another company?
- What escrow requirements do you have?
- How long is your loan lock-in period (the time that the quoted interest rate will be honored)? Will I be able to obtain a lower rate if they drop during this period?
- How long will the loan approval process take?
- How long will it take to close the loan?
- Are there any charges or penalties for prepaying the loan?
Used with permission from Real Estate Checklists & Systems (http://www.realestatechecklists.com)
In my next post, I will discuss step 2 in the home buying process. If you can’t wait, give me a call for a personal consultation. 206-708-9800