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How can I sell my townhouse to buy for a single family home?

Hello,
 I brought my townhouse in late 2007 when the market was selling single family home for an arm and a leg. Soon after the market dropped and now I'm caught in the dilemma of wanting a single family home and can surely afford the one problem is i still owe over $170,000 on my townhouse and the selling price I've seen are about 50% less then what I brought it for; not to include the horror stories I've heard about renting. Please help... I'm just seeing missed opportunities of the payments I'm making on my townhouse i can be making the same or even less on a house. How can I buy the single family house of my dreams while getting rid of my townhouse? If i can buy how soon after? and What is the smartest move? Thank you in advance :)
  • December 29 2011 - Holden Heights
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Answers (6)

I agree with all the answers here.  There is another option.  Work with a Realtor with exeperience in the areas beloe and ask them to advertise your current townhome as either - Assumable or Lease to Own. 

For Assumable (if your lender will allow this) potential new owners would give you a downpayment, get approved by your current lender and take over your payment.  Since you've already been paying on the home for 4 years the loan they assume would only have 26 years to pay on it instead of 30 :).

or

Lease to Own -aka Lease Option - the tenants lease the home for a period of time.  A certain amount of the monthly rent is set aside for them to purchase the home at the end of the lease.

Remember, find a Realtor who is familiar with this.  It was done quite a bit in the 70's and 80's so you will probably need a very experienced agent.
  • January 07 2012
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How far are you moving from the location of the Townhouse to where you want to purchase the new home. The distance might qualify your new home as a second home. If you rent the Townhouse, and decide to buy in the same area, you will be buying the Townhouse as income property. Depending on your loan-to-value (LTV) ratio, you will be asked to come with either 10% or 20% down payment. Banks have caught on and they are calling this "BUY AND BAIL". Buy a new home and bail on your old home.
So contact your local Lender for all your options.

  • January 06 2012
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Depending on your debt to income ratio you may be able to purchase without selling your townhome.  By using a Realtor to rent your townhome and insure the prospective tenants go through a screening process you can really find a better tenant.  You may be able to sell and break even or take a small loss but make it up 3 fold on the buying end.  My advice..get at least 3 CMA's from 2 different Realtors and have them include rental cma info as well.  There is no cost to you for this and I think it will give you some much needed info so you may make the best decision.

If I can help please don't hesitate to ask!

Regards,
Tara
tara@davidrealtygroup.com
  • December 30 2011
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Don't rule out renting your townhome. If you properly market the property and screen prospective renters, you may find the experience to be positive. At a minimum you would want to run a credit check and employment verification to insure that your renters have the capacity to pay rent and a track record of paying on time. If you do not wish to perform those tasks a property manager can handle all of the details for you.

This can free you from the property and, assuming you have enough for a down payment on a single family home, let you take advantage of today's spectacular buys. Long term, you might also enjoy having tenants pay for an asset that you own that may increase in value over time. There may also be tax benefits to converting your town home into a rental property.

My advice is to contact a couple of real estate companies that specialize in property management and let them show you what they can do. It does not cost you a thing to explore the option.

Good luck!
  • December 30 2011
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The best thing you can do without doing a shortsale is to rent out your
townhome. If you do a short sale and it sales, it will take you atleast
2 years before you can purchase again. My advice is if you really want
to get in on great oppotunity to purchase, you should rent your townhome
out.
Allen Mates P.A.,CRS,REOS
  • December 30 2011
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You're upside down on your mortgage (owe more than you can sell it for) and you want to know how to buy another home?

Most likely you can't, unless your income is so high you'd qualify for mortgages on  both homes .

I'm going to take a guess that the numbers won't work.

The only thing you can do (besides all the typical advice to try for a loan modification, short sale, etc) is to sell first  and pay off the mortgage.
In order to do that, you wll need to come to the closing table with cash in hand to make up the loss and pay off the loan.

If you don't have the cash to do that, then I am afraid for now you need to remain where you are.

There is no easy answer for you , or magic wand that can make this happen.

Unfortunately, you are not alone, and so many are in the same boat.
I hope your credit is stil good, and you can continue to pay your current mortgage.
 If so, then you're one of the lucky ones!

My friend's son was in the same position.
His "way out" of it  was to rent out his condo (at a loss of $500 a month) and then buy his single family home.
He had a nice down payment for the new home, and could handle the additional $500 a month to cover the deficit in rent.

In my opinion, that puts him on thin financial ice, as once the lease is up in a year.....he will be worrying about finding a new tenant, and might wind up carrying 2 houses at once.
I would have advised him to bite the bullet, bring money to the table (part of which he used for the down payment) and sell the condo now...be done with it........not have it hanging over his head. I would have advised him to then rent for a year and rebuild his savings.

Could you handle going the rental route??

I am sure the thought entered your mind to simply just walk away...........that's up to you, but there might be financial repercussions to deal with, and certainly your credit will suffer.There's still the issue of qualifying for a new loan.

Sorry, but you might be better off for now staying where you are.
You may also not have any other legitimate options.

Sorry - wish I had a better solution for your problem.

Good luck
  • December 29 2011
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