Profile picture for gonzette

I am paying cash for a house purchase. I might be short by a couple thousand dollars due to fees..

I have sold my house for cash, and want to buy another house for cash from the proceeds of the first house. I think I may end up a little short on the asking  price due to all the fees, commissions etc. Should I worry or just start selling stuff to make sure Ihave the complete amount. The real estate agent is charging 6% commission, that with prorated taxes etc and I will be cutting it close. very close.
  • August 19 2011 - McHenry
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Answers (10)

 Crunch the numbers so you know exactly what you need.  if you cannot negotiate it lower go find another  property.
I am surprised. How anyone can buy anything without knowing if they have all the money needed.
  • August 22 2011
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You can always ask for an extension?  You aren't paying the commission as the buyer right??
  • August 22 2011
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The title company or closing office should be able to give you an estimate of exact money to close. On a cash purchase, fees are generally very low as you don't have all of the loan fees. 

On your purchase side, generally the commission is charged to the seller. 
  • August 22 2011
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I would start selling stuff, so you don't have to take cash advances on your charge cards. You may ask your local bank what they can do for you.
  • August 22 2011
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Profile picture for AndyLinss
You would be in default on the purchase if you can't close (with the entire amount due) by the closing date, so if you haven't negotiated a price on the purchase, that seems to be your best option is to make sure you don't pay more than you can afford for the new place.  Without knowing your circumstances, you should consider a small mortgage or immediate equity line of credit to give yourself some breathing room. The last thing you need in this economy is to be totally broke should some emergency happen (God forbid).  Your Realtor should help you figure this out.  If you are using the same Realtor for the purchase that you used for the sale, make sure they know your financial restrictions before negotiating the purchase (if possible).  Best Wishes! Please let us know how everything works out? 
  • August 20 2011
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I assume you have an attorney so let the attorney crunch the numbers so you know exactly what you need. No one charges 6% anymore so if you cannot negotiate it lower go find another agent or property.
Not sure how anyone can buy something without knowing if they have all the $$$ needed.
  • August 20 2011
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Profile picture for Young Lee 1254
I think you have some options here.  I totally agree with both posts before me.  If you sold your house for cash and have not purchased your other home or put an offer it on it yet, you can always try to negotiate a lower price for the home or ask for a closing cost credit to offset fees. 

If you have already put in the offer and it was accepted then just be honest with your agent.I am sure that if you are cutting it very close you can all work together to get it done. Good Luck.

Young Lee
@yng201
  • August 19 2011
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Hi Gonzette,  

without knowing the exact specifics of your situation it is difficult to advise.  I encourage you to get the estimated closing costs and determine if in fact you will be short and go from there. An experienced agent should be able to guide you through this.


RSK
  • August 19 2011
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Profile picture for inactiveaccount
Hi Gonzette,

Without having seen your purchase contract or knowing your state's laws and customs, it's difficult to give you a really specific answer. However, if you are out of your inspection period, it's pretty likely you won't be able to get your earnest money back if you get to closing without the necessary funds to meet your commitments.

I'd advise you to contact your Realtor now and be frank with him or her. They should be able to get you a fairly decent estimate of what you will need to bring to the closing table. It may even be possible to jiggle some numbers around to help you get this done, but unless you are honest at this stage, you could be setting yourself up for a big problem.

It sounds like you have entered into a legally binding obligation, and it would not be fair to ask agents or other parties to cut their costs or take less than you have committed to pay...However, there may be excess you could cut from the transaction now (for instance, a home warranty, if one is included) and add later, and / or partial financing could even be an option.

Lay your cards on the table with your agent, and be ready to hit craigslist...just in case :)

Good luck, and congratulations on the sale and purchase of your homes.

Emma
  • August 19 2011
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Profile picture for the_country_hick
It may be a little bit late for this.

In your purchase offer have it include all closing costs. That way you know exactly what you will have to pay.
  • August 19 2011
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