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Buy Before You Sell. Too Risky Right? Wrong!

Common Home Owner Myth: I can’t buy a “new” house without first selling my “old” one.

That is the way it is supposed to work…right? You can’t have a new house without getting rid of the “old” one.

Not so.

Take, for example, the story of one of our clients. They had a house (beautiful house, worth about $600,000) and had no intention of leaving.

However, one day this house in their neighborhood went on the market. You know the house. It is the one where every time you go by, you wish it was yours. Unfortunately, this house would never be for sale.

Out of the blue, the unbelievable happens: the house goes up for sale.

Now, most would call this a stroke of luck, then it would dawn on them…

“We can’t have that house. Obviously, something unforeseen has happened, and they’ll want a quick sale. Waiting for us to sell our house first, won’t be acceptable to them. I guess we are out of luck.”

Luckily, this client called us to structure a safe way for him to get his dream home today, buy some time to get his “old” house sold, make both homes affordable during the marketing period, and leave him the exact same long term financing on the “new” home he otherwise would have had.

Now that’s a tall order! But we did it. And, so can you!

Here are 2 ways to buy a new house without selling your “old” one first.

Pull the equity out of your existing house using a Home Equity Line of Credit or a 2nd mortgage. If you could snap your fingers and sell your home, this would be what you’d use to buy the “new” home anyway. So just get it out now. Now, reserve enough of this money to make your “old” house payment for 6-12 months. Your house will take this long to market and with the money set aside, you won’t be tempted to take a low-ball offer. Use the remainder as down payment and get your new first mortgage to complete the purchase. When the “old” house sells, both mortgages are liquidated and you are left with one house and one mortgage…the exact same situation you’d have had if you sold your “old” home before you bought the “new” one. But you accomplished it without the wait and the missed opportunity!

Another way to achieve the same result minus the “old” house payment reserve is to use an 80% first mortgage and a 20% 2nd mortgage also called 100% financing, to buy the new house. You won’t have to put any money down and when your “old” house sells, you use the proceeds to pay off the 2nd. The only difference is you don’t get any “extra” money to use to offset two house payments during the marketing period. Many of you, have existing lines of credit or other sources, so this may not be necessary.

Both scenarios leave you with great permanent financing on the new house.

The 80/20 or 100% financing scenario costs a little more in discount points than a traditional structure, but it’s only to the costs and not the rate. Refer to our website to learn more about 100% financing in our free report called, “Buy With Zero Down!”.

The biggest hurdles you’ll need to clear are 1) making two housing payments and 2) getting loan approval with two housing payments.

Here’s how you do both:

When you pull the money from your existing house, reserve enough to cover up to 12 months of mortgage payments for the “old” house while it is on the market. That way you don’t have to come out of pocket for the payment. Gee, that was easy! Hurdle 1 cleared!

Since most loans are approved through a computer these days, you’ll need a mortgage broker who knows how to use the automated approval computer systems that FNMA and other agencies and lenders use. These approval systems are a Godsend when it comes to creative financing in today’s modern mortgage arena. It may seem strange to you, but to the computer, your financial picture and your need for financing, are simply numbers. It doesn’t care that some of those numbers include 2 housing payments. The new systems are allowing many of our clients an approval with abnormally high debt ratios, sometimes as high as 60%! This is very prevalent, especially with clients who have strong credit and assets after closing…like a 401K. This is your window for approval. Now, you know you’ll not be spending 60% of your income on debt, because you put the money aside in Step 1 to cover the “old” house payment, but the computer doesn’t know that or care. If done right, you’ll get the approval even with very high debt ratios.

Note: Beware! Don’t let an unscrupulous mortgage broker get you to commit mortgage fraud just so you can buy before you sell. Stick with our plan. If you get approved fine. If you don’t, live with it. One way they’d break the rules to get you approved is to “doctor up” a lease agreement on your “old” home to offset the payment and show the computer a lower debt ratio. Don’t do it…it’s a Federal crime!

How do you start?

1) Get approved through the computer system
2) If you need to pull equity out of the existing house; start it now
3) Write an offer on a new house
4) When an offer is accepted, put the existing house up for sale; not before

Lastly, don’t forget you can get a lot more for your “old” home with our revolutionary way to sell your house without paying a real estate commission, (6% commission on a 600,000 house is $36,000!).

Hadi Bahadori / Home Smart Evergreen Realty
26840 Aliso Viejo Parkway #120
Aliso Viejo, CA 92656
Lic #01236623

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Buying a new property and navigating the real estate market is a complex, and often stressful, undertaking for buyers.
It’s no secret that the real estate industry has evolved in numerous ways over the last decade. With the internet and mobile devices taking the market by storm, buyers have unprecedented access to property information at their fingertips, without depending on a real estate agent.

In some instances, property searches have been abandoned altogether by home buyers agent in an attempt to make themselves more efficient with their time. Some realtors assume that since the majority of consumers search for homes online, it has somehow become the consumer’s responsibility rather than their agent. So that begs the question, are buyer’s agents still necessary? In short, yes and here’s why.
A good home buyer’s agent will still carry out many tasks in the buyer’s best interest - tasks that reach far beyond the property search function.
When it comes to buying a home, buyers try to engineer the ultimate balancing act of buying the new one first, THEN putting the current one up on the market before the ink is even dry on the purchase contract. The object-and expectation-is to find that perfect home, then to put the old one on the market in the hope of selling it in the treasured but increasingly mythical simultaneous closing. Just playing it out in your mind is exhausting, but making it actually happen is a truly massive undertaking. What would make anyone think that such an effort is worth trying? Fear! Fear that you might not be able to find the right home after selling your current home. Fear of being homeless. Fear of temporary housing. Fear of the dreaded “double move” (moving from the old home to temporary housing, then again to the new home). Those fears may be legitimate at some level, but there are even greater causes for concern if you plan to buy before selling. Homebuyers typically don't have in-depth knowledge about the real estate markets where they wish to buy homes. They need agents to guide them through neighborhoods and find homes that best suit their needs. Some agents specialize in working with buyers. They help their buyer-clients navigate all aspects of the home buying process, from finding homes to choosing the best mortgage companies. Here's a sampling of the tasks buyer agents undertake on a daily basis.

We also offer the following real estate services:
1.Probate Real Estate
2.Foreclosure Listing
3.First Time Homebuyer Assistance Program

Hadi Bahadori / Home Smart Evergreen Realty
27802 Vista Del Lago E-2
Mission Viejo CA 92692

Blog – Page 3 – homes-for-sale


Home Buyers Agent In Mission Viejo

874 0 01 Feb 2019

Buy Your New Home Before You Sell Your Old One!

859 0 31 Jan 2019

Buying Your First Home in Orange County

808 0 29 Jan 2019
buy home Orange County

Orange County Home Buying Real Estate Market

Among one of the most important facets of any homes that you relocate right into is, certainly; the location. Houses might look superb online, however, there is constantly the opportunity that the location this fantastic house is it might be less than preferable. Before you buy or move into any city, it’s an excellent idea to do a little research and also find out as much as feasible about the place that you are taking into consideration calling home. The logical location to begin asking questions is to your real estate agent. Whether you are relocating from a far away, out of state and even abroad you may want to look for a local real estate agent that focuses on the location that you want. Realtors are a fantastic resource of details and normally, they know more concerning a given location than nearly anybody.
If you are considering to buy a home in the Orange County area, you should do some research before signing the contract. This is the biggest decision one could ever make, so you have to be careful and alert.

Definitely, each of us want to have their very own home, so if you desire to buy one, you have to consider some factors needed in order to have the best home you want. Buying a home doesn’t mean you simply look for home and viola that’s it. There are certain things that you need to do and settle to make sure you could buy the home you want and need.

First of all, you need to apply for a mortgage in order to have the finances you need to purchase a home. Applying for a mortgage is not that easy, you need to make sure of course that you will be working with the right lender. So you need to make simple research in order to find the right lender. You have to contact few lenders and ask several important questions until you finally found the right lender that can provide you with the best loan.

If you work with a lender, you have to make sure that he/she will provide you with plenty of options and not let you focus on a particular one. You have to weigh the options given to you; understand each until you come up with the right one for your situation.

In applying for a mortgage, you need to sign up an application form, make sure to answer all the questions honestly and correctly.

It is advisable to write legibly as well in order to avoid problem and misunderstanding.

First you will be having pre-qualified for a mortgage, but to not go on to the next step until you won’t be having pre-approved for a mortgage. As soon as you have been pre-approved, that is the time for you to move and start looking for home you want in Sarasota real estate.

Of course, before you actually look for home in the market, you have to decide the features you want and need in a home. Do you need a huge yard or small one will be better, how many rooms do you need and the likes.

If it is your first time in Sarasota real estate, you can work with a real estate agent. But take note, do not just work with a real estate agent, make sure that he/she is the right one for you. Take time in finding the right one, you can do this by asking for recommendation and contact few of the real estate agents and interview them until you will have the right one.

With the help of the real estate agent, you can soon find the home you desire in Sarasota real estate. But of course, you need to conduct home inspection before actually making an offer. If the home is in good condition, you and your agent can make an offer than close the deal.

We also offer following services when buying house in Orange County:
1.Free Home Evaluation
2.Free credit services
3.First time home buyer incentives

Hadi Bahadori / Home Smart Evergreen Realty
27802 Vista Del Lago E-2
Mission Viejo CA