Home Sellers Warning for Young Families

If you're thinking about selling your home and moving up, do your homework before offering your home for sale. Read the following story to see what can happen to home sellers who don't do their math.

A young family sold their home in California, before they determined how to buy their next house. All they thought about was moving into a larger home for their growing family.

Two years before, after this young couple purchased their first home, they bought a minivan with payments and increased their credit card debt with home furnishings purchases. Then, the wife quit working to stay home with their baby. The family still had sufficient money to make all payments on time. They fell in love with a larger new model home in a nearby tract home development. The sales agent convinced them the new home would only cost them another $200 per month.

The family had no trouble selling their home. To qualify for the new home mortgage payment, they had to pay off the minivan, student loans, and the credit card debt. Out of their home sale proceeds, these payoffs left less than a 10% down payment for their new home.

Because of their changed income and low down payment, they didn't qualify for the new home of their choice. With only 5% down, the couple had to pay higher interest rates on a second to avoid mortgage insurance. Without the wife's second income, the total payment meant that they only qualified for a new mortgage for a home which cost less than the one they sold!

Before you put your home on the market, make sure you can buy the home you want.

Consider the following financial concerns:

Talk to a loan officer and check your credit. Don't get caught after selling your home, when it's too late, to repair any credit issues. Of course, you may have a great down payment from the sale of your home, but other bills like credit card debt, auto loans, and student loans may need to be paid off so you qualify for the new mortgage payments.

Find out how much of a monthly payment and the down payment amount you'll need to buy the home of your choice.

Do the math. How much can you expect to net from selling your home?

1. Do you have a mortgage prepayment penalty that could eat up a significant amount of your equity?

2. Determine selling commission expenses. Can you sell your home effectively on your own or do you need to pay 6% of your selling price for a real estate agent's expertise?

3. Estimate your closing costs. Ask a local closing or escrow company for an estimated closing cost amount for a home in your price range.

4. How much work does your home need to ready the property for a top-dollar sale? Which upgrades or redecorating expenses make sense financially?

Consider all the expenses of selling, determine your actual profit, match that amount to your down payment, and see how much of a home you can buy with your qualified monthly payment amount. After you do your math homework, you'll be ready to think about selling your home. Don't get caught like this young family and be forced into a lesser home.

Copyright © 2005 Jeanette J. Fisher - All Rights Reserved Worldwide.

Jeanette Fisher helps home owners create homes for glorious living and top-dollar sales. She teaches Design Psychology and real estate investing. Jeanette is the author of many books including "Sell Your Home for Top Dollar--Fast!" and "Credit Help! Get the Credit You Need to Buy Real Estate." For more information on Design Psychology, see http://designpsych.com/ Free Design Psychology for Selling Houses report http://sellfast.info/ "Credit Tips for Mortgage Financing" http://recredithelp.com/

---

Condo Hotel Trends - A Look at the Big Picture in Vacation Home Ownership

Condo hotels are one of the hottest products in today's... Read More

The Sadness of Old Buildings

From the book No Smooshing!For years, I've carried on a... Read More

Free Tips That Will Dramatically Increase the Selling Value Of Your House (Part 1)

Did you know that it's a proven fact that a... Read More

How to Prepare Yourself for Owning a Dual Purpose Second Home

If you are thinking about buying a second home, you... Read More

Boston Real Estate ? Choosing the Right Boston Real Estate Agent

As a successful Boston real estate agent, it always puzzled... Read More

Real Estate Investing - Maximum Leveraging of Your Money

At this moment, you have access to some amount of... Read More

The New First Impression in Home Selling

As an ASP Home Stager® I know how important curb... Read More

The Real Estate Market In Spain: Making Profits Out Of Sand

The Real estate market in Spain keeps gaining momentum and... Read More

Are You Trying to Hit a Home Run With Your Prospects Without Asking Them on a Date?

Real Estate email marketingDo you remember the old School girl/boy... Read More

Selling Your Home In The Winter

In many parts of the country, selling a home during... Read More

Homes in Chapel Hill

Chapel Hill is located right in the middle of North... Read More

Selling Your Home on Your Own ? Examples of Problems and Solutions

What can go wrong? About a gazillion things, but this... Read More

Landscaping Adds Great Value to Real Estate And Helps You Sell

Over the years several of our clients have had professional... Read More

A Real Estate Investing Primer

There are a great many books and web sites devoted... Read More

Property Investment - What Future For the Biggest Bubble of All Time?

The Economist magazine published a special report in this months... Read More

Industrial Income Property Financing: Part 3 of 3

Financial ConcernsOf the three types of income property, industrial property... Read More

Do You Want To Sell Your Rehabs Fast?

That's an obvious question ? we all do! So what... Read More

Property Investing Secrets 5

Property Investing Secrets:How To Work With Agents And Get What... Read More

Property Auction & Why You Should Run A Mile From Them

That's A Funny Thing To Say About Property Auctions; They're... Read More

Is Housing and Real Estate Bubble Hype Irrational Exuberance?

Not so, says the author of this article and four... Read More

Mancos Real Estate

Real estate: availability and costIn 2000, the median home value... Read More

Title Insurance Protects Your Financial Investment

You purchase homeowners insurance to protect yourself financially in case... Read More

How To Find a Real Estate Agent

You may be of the opinion that you don't need... Read More

Real Estate Wealth Protection Through Short Sales

Is a sharp correction in store for the real estate... Read More

Do You Know What Design/Construct (or Design/Build ) Means? I Think You Should!

These real questions on 'How To' build are answered by... Read More

Home Loans ? Identity Theft Protection Could Hurt Home Sales

Identity theft has been a hot topic in the news... Read More

An Ideal Way to Purchase Your New Home without Strict Banking Regulations

You've searched high and low around town looking for that... Read More

Finding Southern California Real Estate Foreclosure Property

Southern california real estate foreclosure:If you want to find southern... Read More

What Is a CMA

"CMA" is an abbreviation real estate agents use for a... Read More

Investment Real Estate Secret: Buy a House Today, With No Money Down

If you've read my article "Purchasing Property With No Money... Read More

How Do I Implement The Lease Purchase Plan?

Well, as we have discussed in previous newsletters first you... Read More

Real Estate Investing ? ?The Neighborhood Factor?

Real estate investing can be a dream career when the... Read More

Guide To Finding Maui Waterfront Property

Have you ever dreamed of living in a spectacular tropical... Read More