Thursday, June 14, 2012
Don't cross the street without looking both ways first: how you should approach buying or selling a home.
The title of this post is inspired by a client. You should look both ways when doing a home search/home sale because of the many aspects in the home buying (and selling) process; (2)specific criteria related to the neighborhood you are buying in (or selling) and what one buys, one often eventually sells. Know the ins and outs of the home sale process before you begin looking or marketing your home for sale. An important but overlooked aspect in buying a home is considering all the implications when it is time to sell. If you are buying a home in an H.O.A., condo or co-op community, understand all the rules and regulations regarding selling or renting your home out when it is time to move. It is hard to consider such things when you are in what I call “the romance of buying”. I am working on a transaction where the sellers have to bring an extra $10k to settlement to make up the difference between the sold price and the mortgage balance. Yes, the sellers are selling their home for less money than it is worth, but they are not doing a short sale. One reason they aren’t doing a short sale is because they are buying a new home and their credit would suffer so much that they probably wouldn’t be able to get a loan for buying a new home without a guarantor. So you may ask why the owners aren’t renting their place out instead of selling it. I do think this is the right market to hold onto a home as a rental when you move just in case a seller cannot net what he or she wants and because the rental market seems to be stronger. The community guidelines say that all owners must be primary residences…this means no investors. Therefore, when it is time to move, one has to sell. A buyer needs to consider this and say this may be ‘the cost of doing business’, if when it is time to sell, he/she cannot sell their home for more than it is worth. Their situation may be different and they could consider doing a short sale. In this particular case, it has been a rather costly few months for the sellers as they just got married…paid for the wedding themselves, buying a new place and are now selling their old home at a $10k + loss. I hope that the sellers also buying at a lower price. It is hard to buy low and sell high, so hopefully the sellers get a good deal on their new home. I was asked whether it is a good idea financially to buy in this neighborhood. I said it would be a bad idea to buy this home if the plan is to move in one or two years, but a sound decision, even though the market is unpredictable, if the plan is to live in the new home for several years since the only option is to live in the home. So, please, if you are buying a home in an H.O.A., condo or co-op community, read the association documents (they may be called by a different name) very carefully to understand all of the rules and regulations of the community. Currently, there is a contingency period in the Maryland and Washington, D.C. sales contract for reviewing the documents. If you have questions, don’t hesitate to ask your realtor. And, work with a realtor who is a consultant and your advocate. If you or someone you know is thinking of moving, wants to know the ins and outs of the process and aren’t working with a realtor, I would love to talk with you about your plans and how I can make your home dreams come true. Life is good! Adam Call: (301)943-4370 301-718-4100-ask for Adam email@example.com Adam Bashein Licensed in MD & DC Weichert Realtors