Dh and I really love a particular house that meets all our criteria. We weren't planning to look until next year once I return to work, but I just happened to find this one.
Here is our dilemma, our current house isn't on the market yet and because dh is self-employed, getting finance is a lot harder.
The finance broker said it would be a yes if I was working. Ds2 is about to turn 8m old, I'm not sure if I should return now (he will be looked after by grandparents) in order to get finance.
Also how do we go about it with our house not on the market, the real estate agent is an old friend of mine and he said he can sell our house too.
But how do we guarantee the new house is ours while ours is on the market? Do we sign a contract saying its sold subject to our house selling within a certain time and subject to finance? We won't have a proper deposit above $20k until ours sells and receives a deposit.
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07-10-2012 06:43 #1
Buying a house question (I did ask this on another section, sorry for double post)
07-10-2012 07:18 #2-
- Join Date
- Jul 2012
I don't know too much about it but I believe you need a bridging loan and perhaps you ask for a longer settlememt on the house you want to buy.
Your financial broker and real estate agent should be able to help you with these questions though. There is a way...lots of people end up in this situation. I know my next door neighbours are putting their house on the market so they can go to an auction and we have looked at 2 houses ourselves recently where the owners have had bridging loans.
07-10-2012 07:46 #3
Thanks. I just wanted to hear experiences from others.
07-10-2012 08:23 #4
For us, when we wanted to sell our first house to buy our second, we were able to get finance so long as our house sold, and like you, we found a house sooner than expected and ours wasn't yet on the market. All that happened was we put in an offer on the house we wanted with it stating in the conditions in the contract, subject to sale of house and subject to finance then we had a 30 day settlement from the time our house sold.
Because the purchase was subject to sale of our house, there was a clause in the contract that allowed the seller 48 hours from signing contract, to accept another offer if it was a cash buyer or pre-approved finance and ready to go.
As for long settlements, you absolutely can ask for a longer one, when we bought our third house (kept the second as investment), we asked for a 90 day settlement to allow us proper time to pack and be organised. But you can ask for longer, DH's uncle invests in property and has often asked for year long settlements, it's all dependent on what the seller will agree to
07-10-2012 08:52 #5
Thanks so much. Did you have a deposit for the first purchase before your house sold? If settlement was 30 days after your house sold, and 90 for the other, were you stranded in between??
07-10-2012 09:11 #6
No we didn't have a deposit. The equity in the house being sold was to be used as the deposit, and the bank lent us the rest.
No, no, the house we sold was a 30 day settlement (so 30 days for us to get out of our sold house, and for the tenants to move out of the house we bought so we could move in on settlement day). The 90 day settlement was another separate house purchase, sorry to confuse you
07-10-2012 09:44 #7
Thanks again. This house doesnt have tenants so I would have to try match settlement dates I would assume?
07-10-2012 10:27 #8
While I don't work in conveyancing anymore I did a few years ago and it was really common to have a purchase contract conditional on the current house selling. If the seller isn't fussed about getting the money asap then I don't see why this would be a problem for them keep in mind if they're planning on using the money to move or purchase another property they may not be willing to wait the extra time for your house to sell.
I hope everything works in your favour though its so hard finding your dream house and not being in a position to buy straight away!
07-10-2012 11:34 #9
Thank you. Yes, it's hard!!
07-10-2012 12:33 #10
Just to give you another perspective, I am a lawyer and have practiced in property and real estate many moons ago. DH and I have also bought and sold about 9 houses over the past 15 years, and we always own at least 2 houses at any point in time. So I know a little about where you're at at the moment.
I would be speaking to your bank directly. Mortgage and finance brokers are great, but sometimes can encourage people into very high risk strategies, which are fantastic if they come off but devastating if they don't. I would avoid a bridging loan as you can wind up paying extremely high interest payments very quickly.
We've found dealing with our bank most helpful, as they often have strategies for people in your situation. You can make your purchase contract subject to the sale of your property, including payment of the deposit, but the vendor would want to be able to cancel the contract if they got an unconditional offer (except for finance).
In my 15 years of buying houses, I too have fallen in love with places that fit all our criteria, and then had to let them go because the timing wasn't right. We are in that situation now. But I know from experience if we do miss out another great house will probably come along, maybe not straight away, but it does happen.
Good luck. It is a very stressful time.
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