Loading...
Financing a trade-up move is far more difficult now than it was before the economic meltdown of fall 2008. Today’s guidelines require such buyers to qualify to carry two mortgages, to have verifiable income and have enough cash for a down payment.
Most of today’s repeat buyers can’t qualify to carry two mortgages at one time. And they can’t come up with a cash down payment without liquidating the equity in their home. In most cases, this means they need to sell that home before they can buy the next one.
Offers contingent on the sale of another property haven’t been popular in many markets because they’re riskier than sales that don’t hinge on the close of another transaction. Even so, considering current financing constraints, sellers who don’t receive offers should consider a contingent-sale offer, but only under the right conditions.
From the seller standpoint, you want to make sure that the buyers are qualified to purchase your home and that they properly prepare and price their home to sell. If you receive an offer that is contingent on a home selling that is in a lower price range than your home, it might be worth the risk. Lower-priced homes have been selling faster than the upper-end homes.
HOUSE-HUNTING TIP: Sellers need to take an active role in the sale of the buyers’ property to ensure that both transactions close. This means making sure that the buyers’ home is in good condition, shows well and is priced right for the market. If the buyers need to sell their home for a certain price to buy yours and their price is higher than what the market will support, it’s a waste of everyone’s time to move forward.
Read the rest at the San Francisco Chronicle.
