Homebuying question

[englishteacha]

I guess my question is, how does one approach purchasing a new house when you currently own one? Read on for the story:

We currently own a small 2 bedroom, 1 bath Cape Cod style home. (We bought it right out of college almost 10 years ago.) My husband needs the second bedroom as his office for his business as an IT consultant. He needs room to work, to repair computers, etc.. We just found out our family is going to be expanding in the spring (We're surprised but pleased). So...we're facing a bit of a dilemma. Our house only has 4 rooms, and there's really no other place for hubby's office. We know we can make do for a while...baby will stay in our room in the beginning anyway, but eventually we'll all want our own spaces. Our current home isn't really situated to add on to without a lot of major construction. An advantage to our current home is it's in the country on 5+ acres of land, though on a busy road.

We'd pondered the idea of moving and have been casually browsing online for bigger places. We found a really nice, larger house in a good neighborhood in our town. We drove by it today and it really is in a great location. The asking price on the "new" house is $150K, and our home we can probably sell for around $90K, maybe more because we've done a lot of updating in the time we've owned it. We're going to need more room for baby at some point, and if we find a great place now, I guess I would like some advice on what we could do.

 

[DawnM]

In today's market, I would NOT buy without selling first. I have seen people strapped with 2 mortgages for years and years.

Any chance you can add on to your current house? If your house is worth 90K and you want to buy one for $150K, how much could you add on for $60K and not have to actually move?

Dawn

 

[cbg1027]

The best advice you can get would be from a local realtor. They will do a free initial consultation/first meeting with you. Wouldn't hurt to meet with someone, or a few people.

And you probably won't be able to get 90k for your house. Sorry....owners always think a place is worth more than any buyer will offer. So be prepared if a realtor comes in and tells you to list for something a lot less.

 

[powelweb]

Definitely agree with Dawn above that you don't want to have 2 mortgages at once.

We actually sold and bought last summer within 3 months- backwards as we found the new house before we even had ours on the market which I would now never recommend (live and learn).

We did a contingency that we had to sell the old house in the P&S on the new place, but it was very stressful to sell the old place as we had to extend the contract and our sellers were starting to get antsy.

Now we had a 6 year old getting ready for a new school year, but I also can't imagine dealing with that during a pregnancy either.

I would suggest selling your current home first and work out a plan for temp housing that includes storing your belongings with friends or at a storage site just in case you can't move directly from old house to new house.

good luck! We've been in our new house almost a year and still love it.

 

[Darcy03231]

Friends of ours had a cape similar to what you've described. They loved where they lived, the schools in the area, etc., so they added a second floor with 2 more bedroom and another bathroom. If you didn't know that the house was a one story before, you'd never guess that's how it started out. They met with a local builder when they decided to add on. He's the one that suggested the second floor because it's less expensive to build up than out. The second floor bathroom is located pretty much right over where the first floor bathroom/kitchen is so they saved a lot of money because they just had to extend the plumbing from the 1st floor to the 2nd and not relocate it.

As a PP pointed out if you really want to move I would sell my house first before shopping for a new one.

 

[crjack]

Definitely talk to a local realtor who is familiar with your area. They can tell you what they think your house will sell for and, more importantly, how quickly.

It is possible to have a contingency in your offer on a new home that involves selling your current one but of course that makes your offer much less appealing on your prospective house.

Some of it really depends on your area's market conditions. In my area of Boston real estate has not been hit that hard so homes are definitely still selling, especially homes geared to the entry market.

You also need to consider would you rent temporarily if needed. You could list your home and if it sells before you find something else it may make sense to do a short term rental rather than rush the choice of a new place.

A good realtor is the best place to start for a free analysis.

 

[mom2alix]

For an idea of what housing values are in your area, try www.zillow.com
Interesting website with lots of information.

Good luck!

 

[Judique]

I guess my question is, how does one approach purchasing a new house when you currently own one? Read on for the story:

We currently own a small 2 bedroom, 1 bath Cape Cod style home. (We bought it right out of college almost 10 years ago.) My husband needs the second bedroom as his office for his business as an IT consultant. He needs room to work, to repair computers, etc.. We just found out our family is going to be expanding in the spring (We're surprised but pleased). So...we're facing a bit of a dilemma. Our house only has 4 rooms, and there's really no other place for hubby's office. We know we can make do for a while...baby will stay in our room in the beginning anyway, but eventually we'll all want our own spaces. Our current home isn't really situated to add on to without a lot of major construction. An advantage to our current home is it's in the country on 5+ acres of land, though on a busy road.

We'd pondered the idea of moving and have been casually browsing online for bigger places. We found a really nice, larger house in a good neighborhood in our town. We drove by it today and it really is in a great location. The asking price on the "new" house is $150K, and our home we can probably sell for around $90K, maybe more because we've done a lot of updating in the time we've owned it. We're going to need more room for baby at some point, and if we find a great place now, I guess I would like some advice on what we could do.

Can you afford to keep this property as a rental property and would it generate enough rent to pay it's mortgage - assuming you have one?

 

[Kitzka]

Since you have so much land how about building something for hubby to work in? Friends live in a very nice but small house but had lots of land. They built a garage like structure to act as her studio (she's an artist). Or do you have garage you could convert?

Lara

 

[scrapquitler]

I guess my question is, how does one approach purchasing a new house when you currently own one? Read on for the story:

We currently own a small 2 bedroom, 1 bath Cape Cod style home. (We bought it right out of college almost 10 years ago.) My husband needs the second bedroom as his office for his business as an IT consultant. He needs room to work, to repair computers, etc.. We just found out our family is going to be expanding in the spring (We're surprised but pleased). So...we're facing a bit of a dilemma. Our house only has 4 rooms, and there's really no other place for hubby's office. We know we can make do for a while...baby will stay in our room in the beginning anyway, but eventually we'll all want our own spaces. Our current home isn't really situated to add on to without a lot of major construction. An advantage to our current home is it's in the country on 5+ acres of land, though on a busy road.

We'd pondered the idea of moving and have been casually browsing online for bigger places. We found a really nice, larger house in a good neighborhood in our town. We drove by it today and it really is in a great location. The asking price on the "new" house is $150K, and our home we can probably sell for around $90K, maybe more because we've done a lot of updating in the time we've owned it. We're going to need more room for baby at some point, and if we find a great place now, I guess I would like some advice on what we could do.

Since homes now take so long to sell, if I were in your position, I would put the house on the market as soon as I thought I was ready to do so, and I would not even look at new homes until I had a signed contract with a buyer for my current home.

I say this only because I would not want to have to carry two mortgages at once, and if it came down to a rush to buy situation, I would try to negotiate to rent back for a month or two until my closing (or find a short term rental while I wait to close on my new home).

 

[disneyofcourse]

Personally, I would go to Home Depot and buy one of the nice two story sheds and hook it up to electricity, get a electric heater, A/C unit in the window and put in lighting, insulation, drywall and flooring. You get a nice office that's private and for not that much money.

 

[DISNEYSIX]

Definitely agree with Dawn above that you don't want to have 2 mortgages at once.

Many borrowers are finding that they have no choice but to have two mortgages because they are upside down on their existing residence due to the significant decrease in home values.

 

[Seahunt]

In today's market, I would NOT buy without selling first. I have seen people strapped with 2 mortgages for years and years.

Since homes now take so long to sell, if I were in your position, I would put the house on the market as soon as I thought I was ready to do so, and I would not even look at new homes until I had a signed contract with a buyer for my current home.

Yep, what they said So many horror stories of people stuck with two houses (which means two property tax bills, two property upkeep and maintenance costs, etc.)

JMO but even having a signed contract on your house might not be safe - buyers back out all the time, even up to the day of closing

So if you sell your home and then turn around and buy before closing on your house, be sure and put a clause in your contact that you can get out of your purchase if the buyers of your house don't close....

I know it's hard to wait, but sell first and then look - the house you like right now will probably be gone - but there will be another, even better one for you out there

 

[Lisa loves Pooh]

I would totally sell first and then buy.

But to answer your question of how--they used to do bridge loans and folks might have a contingency in their closing that they will buy the new home when the old one is sold or whatever.

That is very risky.


For us--we knew we could not sell our old home, so we bought a second home and applied with the assumption that our old home would remain vacant. (We didn't want our income to be rent dependent.) Not typically recommended as a wise financial move--but it is what we felt we needed to do. Thus, our budget for our 2nd home was much less than it would have been had the other home been sold. (we moved out of state due to layoff/new job)

2 mortgages kinda stinks, btw.

Could you possibly transition to an apartment so that your home can be staged and sold...then you can buy a house before your lease expires if you are lucky to sell your home within a year.

 

[Cindy B]

We have a Cape Cod as well. We have two adults, two teenagers and an computer office in our house.

First, if you have the top "attic" story.. that became our (adults) bedroom. Sure it is shaped somewhat oddly but it works.

The two downstairs bedrooms are the kids rooms.

The office is in the basement. DH is thinking of moving to the upstairs area (former dining room) just for convenience sake.

We tried to sell our house, but it was more like "cheaper to keep her". We just upgraded. We still only have one bathroom, but we are looking to get that taken care of as well.

Would I love to have a bigger house? Of course. I drive by my dream house street all the time. I will say I don't want a big mortgage payment, big tax payment and larger utility bills. Plus I will have two kids in college in a few years. Why buy a bigger, prettier house when I have tuition to pay and kids that aren't there?

Unless something happens -the neighborhood suddenly getting worse or it is unsafe to be there- we will stay here.

And don't do two mortgages. I did that years ago.. it was the most stressful time of my life, and I was pregnant as well. There is nothing worse than feeling extreme stress about your housing as well as the baby.

 

[Golf4food]

In today's market, I would NOT buy without selling first. I have seen people strapped with 2 mortgages for years and years.

Any chance you can add on to your current house? If your house is worth 90K and you want to buy one for $150K, how much could you add on for $60K and not have to actually move?

Dawn

Absolutely. Under no uncertain terms should you move without selling and have two mortgages to cover. Trust me. It isn't fun. Can you keep paying for both for a year? Two years? Three? There is no guarantee it will sell anytime soon or for the amount you need.

Sell this one, find a place to lease short term, buy a new one - in that order. You will be much better off. It isn't worth the risk.

Signed,
Personal Experience

 

[Suz D]

Is there a possibility of subdividing your current 5 acres, selling your current house and building a new one on land you already own? Sometimes building new is about the same cost and you can get exactly what you want. You could also put the new house over a basement and leave that unfinished for the time being. If you're handy you could do some of the finish work yourself to save $$ (painting, installing cabinets, etc).