Do you have homeowners who would like to sell and buy another home? Of course, you do. But, how can they accomplish their goals without losing their sanity or being homeless? Here are 3 solutions for them—
- Post-Closing Occupancy Agreement—This is what I tell my clients who are selling and buying. You put your home on the market and you get 8 offers on it. What offer is the best offer? They will normally tell me the highest offer…of course. But, is it? I then tell them that this buyer is asking/demanding that you close and move out within 15 days. Thus, you will have to do a double-move. So, is this offer still the best offer I ask them? Every homeowner has EMPHATICALLY SAID NO! But, another offer, that’s $10,000 less, allows you the homeowner to stay in your home for up to 59 days after closing rent-free. Thus, giving you an extra 59 days to find your new home. How does this offer sound I ask? AWESOME they typically tell me! More homeowners need to know this option.
- The homeowners do a Bridge Loan, a 6 month loan, that allows them to access their home’s equity so that they can go and buy the new home before selling their current home first.
- I help your clients discover a smaller down payment that is available to them and then they use that money to buy their new home before selling their current home. They just need to put 5% down and go with a conventional loan. What are some sources for this money? Could be car equity loans, 401k loans, family gifts, etc. Family gifts are much easier to get if the families know they will get their money back in 2 or 3 months. So, they buy their new home and move into their new home and then they list and sell their current home. Now here’s the MAGIC…after they have made 1-3 payments on their new home our loan servicers will allow them to make a principal reduction payment and ask for a Re-Amortization of their loan term, which can greatly reduce their monthly payment. For example, if they pay down the principal balance by $100k their P&I payment will drop by roughly $500 and they can also eliminate their mortgage insurance payment this way too, saving them even more money.