Summer Aston Real Estate Group https://summerastonrealestate.com Summer Aston Real Estate Group Your Source For Real Estate Tue, 07 Apr 2026 18:16:07 +0000 hourly 1 https://wordpress.org/?v=6.8.3 Star, Idaho part Two! https://summerastonrealestate.com/real-estate-blog/star-idaho-part-two/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5716
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Discover Idaho Living: Boise to Yellowstone https://summerastonrealestate.com/real-estate-blog/discover-idaho-living-boise-to-yellowstone/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5906
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Where are the Buyers? HUGE CHANGES in the Boise, Idaho housing market! https://summerastonrealestate.com/real-estate-blog/where-are-the-buyers-huge-changes-in-the-boise-idaho-housing-market/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=6117
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> HUGE shop in this $1,295,000 ACREAGE dream home in Marsing, Idaho! https://summerastonrealestate.com/real-estate-blog/huge-shop-in-this-1295000-acreage-dream-home-in-marsing-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=6099
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Tour this $829,900 HILLTOP Avimor Boise Idaho Home-No CID tax! https://summerastonrealestate.com/real-estate-blog/tour-this-829900-hilltop-avimor-boise-idaho-home-no-cid-tax/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5992
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> What’s Next for Boise Real Estate? 2025 Housing Market Predictions! https://summerastonrealestate.com/real-estate-blog/whats-next-for-boise-real-estate-2025-housing-market-predictions/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5794
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise’s Dirty Secret – Inversion Exposed! https://summerastonrealestate.com/real-estate-blog/boises-dirty-secret-inversion-exposed/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5811
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise Idaho Winter Tradition: The Ultimate Guide to Christmas Tree Cutting https://summerastonrealestate.com/real-estate-blog/boise-idaho-winter-tradition-the-ultimate-guide-to-christmas-tree-cutting/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5714
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Star, Idaho https://summerastonrealestate.com/real-estate-blog/star-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5669
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Did Boise’s Smokey Summer Deter Buyers? Recap of Boise’s Summer Housing Market! https://summerastonrealestate.com/real-estate-blog/did-boises-smokey-summer-deter-buyers-recap-of-boises-summer-housing-market/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5592
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Gorgeous Avimor Home in the Hills of Eagle, Idaho https://summerastonrealestate.com/real-estate-blog/gorgeous-avimor-home-in-the-hills-of-eagle-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5340
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> More Inventory for Boise Home Buyers? https://summerastonrealestate.com/real-estate-blog/more-inventory-for-boise-home-buyers/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5266
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Worth the Hype? – Meridian’s SoMe District https://summerastonrealestate.com/real-estate-blog/worth-the-hype-meridians-some-district/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5241
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Charming Brookwood Home in Eagle Idaho! https://summerastonrealestate.com/real-estate-blog/charming-brookwood-home-in-eagle-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5508
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> The TRUTH About Future Home Prices in Boise https://summerastonrealestate.com/real-estate-blog/the-truth-about-future-home-prices-in-boise/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5179
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> I Hated Boise Winters Until I Learned This! https://summerastonrealestate.com/real-estate-blog/i-hated-boise-winters-until-i-learned-this/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5103
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Living in Boise, Idaho – Must Watch Updated Pros and Cons! https://summerastonrealestate.com/real-estate-blog/living-in-boise-idaho-must-watch-updated-pros-and-cons/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5032
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Can You Survive the Boise Winter Weather? https://summerastonrealestate.com/real-estate-blog/can-you-survive-the-boise-winter-weather/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5027
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> 2024 Boise Housing Market Predictions: A Reverse Market Crash? https://summerastonrealestate.com/real-estate-blog/2024-boise-housing-market-predictions-a-reverse-market-crash/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=5016
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> MASSIVE new development coming to Idaho! Tour of Valnova! https://summerastonrealestate.com/real-estate-blog/massive-new-development-coming-to-idaho-tour-of-valnova/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4913
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise to McCall- Driving Tour! https://summerastonrealestate.com/real-estate-blog/boise-to-mccall-driving-tour/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4887
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Emmett Idaho – The Best Small Town in the West! https://summerastonrealestate.com/real-estate-blog/emmett-idaho-the-best-small-town-in-the-west/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4621
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Eagle, Idaho’s Estrada – A New Construction Tour https://summerastonrealestate.com/real-estate-blog/eagle-idahos-estrada-a-new-construction-tour/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4491
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Eagle, Idaho’s Sterling Heights – A New Construction Tour! https://summerastonrealestate.com/real-estate-blog/eagle-idahos-sterling-heights-a-new-construction-tour/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4456
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise Housing Market: Is the Slow Down Here to Stay? https://summerastonrealestate.com/real-estate-blog/boise-housing-market-is-the-slow-down-here-to-stay/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4440
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> SOLD! (September 2023) https://summerastonrealestate.com/real-estate-blog/inside-a-charming-west-highlands-home-for-sale-in-middleton-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4357
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise’s Hottest Summer Housing Market Trends! https://summerastonrealestate.com/real-estate-blog/boises-hottest-summer-housing-market-trends/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4119
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Cost of Living in Boise Idaho 2023 https://summerastonrealestate.com/real-estate-blog/cost-of-living-in-boise-idaho-2023/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=4059
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise, Idaho – Will it Flood? https://summerastonrealestate.com/real-estate-blog/boise-idaho-will-it-flood/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=3973
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> HAS THE BOISE HOUSING MARKET BOTTOMED OUT??? https://summerastonrealestate.com/real-estate-blog/has-the-boise-housing-market-bottomed-out/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=3840
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Where to Live to Avoid Natural Disasters and Bugs https://summerastonrealestate.com/real-estate-blog/where-to-live-to-avoid-natural-disasters-and-bugs/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=3817
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> IDAHO SCHOOLS – FREEDOM TO CHOOSE! https://summerastonrealestate.com/real-estate-blog/idaho-schools-freedom-to-choose/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=3737
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise Housing Market Update – Multiple Offers!? https://summerastonrealestate.com/real-estate-blog/boise-housing-market-update-multiple-offers/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=3706
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Let’s Tour CBH Homes – Idaho’s Largest Builder! https://summerastonrealestate.com/real-estate-blog/lets-tour-cbh-homes-idahos-largest-builder/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=3469
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise Housing Market- So Many HOAs! https://summerastonrealestate.com/real-estate-blog/boise-housing-market-so-many-hoas/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=3027
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> LEAVING CALIFORNIA – AN HONEST CONVERSATION https://summerastonrealestate.com/real-estate-blog/leaving-california-an-honest-conversation/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2919
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> 2023 BOISE HOUSING MARKET PREDICTIONS! https://summerastonrealestate.com/real-estate-blog/2023-boise-housing-market-predictions/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2895
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise Housing Market Update (Christmas Special!) https://summerastonrealestate.com/real-estate-blog/boise-housing-market-update-christmas-special/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2866
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> October Housing Market Update – The Resistance https://summerastonrealestate.com/real-estate-blog/october-housing-market-update-the-resistance/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2809
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Thinking of retiring in Boise, Idaho? It might just be one of the Best Places to retire in the US! https://summerastonrealestate.com/real-estate-blog/thinking-of-retiring-in-boise-idaho-it-might-just-be-one-of-the-best-places-to-retire-in-the-us/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2767
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Is Boise, Idaho the #1 Most Overvalued Housing Market!?! https://summerastonrealestate.com/real-estate-blog/is-boise-idaho-the-1-most-overvalued-housing-market/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2724
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Inside a Champion Park Home in Meridian Idaho https://summerastonrealestate.com/real-estate-blog/inside-a-champion-park-home-in-meridian-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2688
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> August Housing Market Update – It’s a Hot Mess! https://summerastonrealestate.com/real-estate-blog/housing-market-update-should-you-sell-now/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2601
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Should I Buy a House Now in the Boise Housing Market or wait? https://summerastonrealestate.com/real-estate-blog/should-i-buy-a-house-now-in-the-boise-housing-market-or-wait/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2580
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> JUNE 2022 – BOISE HOUSING MARKET RESET UPDATE https://summerastonrealestate.com/real-estate-blog/june-2022-boise-housing-market-reset-update/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2557
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> What is That? Your Questions About Homes in Boise Answered! https://summerastonrealestate.com/real-estate-blog/what-is-that-your-questions-about-homes-in-boise-answered/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2551
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> May 2022 Boise Housing Market Shift Update https://summerastonrealestate.com/real-estate-blog/may-2022-boise-housing-market-shift-update/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2493
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Idaho Homebuilders: https://summerastonrealestate.com/real-estate-blog/idaho-homebuilders-eaglewood-homes/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2390
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise Housing Market Update March 2022 https://summerastonrealestate.com/real-estate-blog/boise-housing-market-update-march-2022/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2363
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Interactive Boise Map Tour for your Boise Visit! https://summerastonrealestate.com/real-estate-blog/interactive-boise-map-tour-for-your-boise-visit/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=2326
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Buying and Selling a House at the Same Time when Moving to Boise! https://summerastonrealestate.com/real-estate-blog/buying-and-selling-a-house-at-the-same-time-when-moving-to-boise/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=1528
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Avimor, Idaho – A Boise Foothill Community https://summerastonrealestate.com/real-estate-blog/avimor-idaho-a-boise-foothill-community/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=1488
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Eagle Idaho-Comparing Communities Part 2 https://summerastonrealestate.com/real-estate-blog/eagle-idaho-comparing-communities-part-2/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=1298
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Eagle Idaho-Comparing Communities Part 1 https://summerastonrealestate.com/real-estate-blog/eagle-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=1163
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise Planning and Predictions 2022 https://summerastonrealestate.com/real-estate-blog/boise-planning-predictions-2022/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=1101
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Fun Things to do in Boise: Hiking to Jump Creek Falls https://summerastonrealestate.com/real-estate-blog/fun-things-to-do-in-boise-hiking-to-jump-creek-falls/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=1002
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Hikes in Boise: Smith’s Creek (and Hidden Waterfall!) https://summerastonrealestate.com/real-estate-blog/hikes-in-boise-smiths-creek-and-hidden-waterfall/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=995
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> What’s the Weather Really Like in Boise, Idaho? https://summerastonrealestate.com/real-estate-blog/whats-the-weather-really-like-in-boise-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=987
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> All About Nampa Idaho! https://summerastonrealestate.com/real-estate-blog/all-about-nampa-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=946
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Living Near the Boise Trails https://summerastonrealestate.com/real-estate-blog/living-near-the-boise-trails/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=914
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Will the Boise Housing Market Crash? https://summerastonrealestate.com/real-estate-blog/will-the-boise-housing-market-crash/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=889
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Living in Boise, Idaho: Pros and Cons https://summerastonrealestate.com/real-estate-blog/living-in-boise-idaho-pros-and-cons/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=822
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Buying a House on Small Acreage in Boise, Idaho https://summerastonrealestate.com/real-estate-blog/buying-a-house-on-small-acreage-in-boise-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=976
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> 18737 N Start Point Place Boise, ID https://summerastonrealestate.com/real-estate-blog/18737-n-start-point-place-boise-id/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=698
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Boise Economy and Employment https://summerastonrealestate.com/real-estate-blog/boise-economy-and-employment/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=932
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> New Construction in Boise, Idaho: https://summerastonrealestate.com/real-estate-blog/new-construction-in-boise-idaho/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate.com/?p=1006
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Inside a $599,900 Eagle Idaho Charming Home! https://summerastonrealestate.com/real-estate-blog/tour-an-eagle-idaho-home/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston https://summerastonrealestate-real-estate-52.eapsites03.com/?p=274
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

]]> Tour a $1,059,000 Dry Creek Ranch Home! https://summerastonrealestate.com/real-estate-blog/dry-creek-ranch-home-tour/ Mon, 21 Feb 2022 22:16:10 +0000 Summer Aston http://summerastonrealestate-real-estate-52.eapsites03.com/?p=1
https://www.youtube.com/watch?v=L6asMmZ0O3w

Moving to Boise- Buying and Selling a House at the Same Time

You want to buy a house in Boise, but you have a home to sell first? What are your options to make that happen and which is best for you? Let’s find out…

Many of you have reached out to us, let us know you’ve visited, and done your research. You're ready to make the move but are worried buying and selling a house at the same time, especially with our market not being very conducive to contingent offers. (Curious about the Boise communities? (Click here to learn more!)

The good news is that there are several options for buying and selling a house at the same time so that you can make the move to Boise, or even make the move within Boise. Locals are facing the same concerns, including how to buy without a contingent offer. So, I will be talking about the top 5 ways to do that, the pros and cons of each, and the risks and benefits of each so you can figure out what might be best for you as you plan a move in the Boise Idaho area.

The main problem we are trying to solve when buying and selling a house at the same time is that in order to make a down payment or even pay cash, you need the money and equity out of your current home to purchase the next home, and ideally you would do so at the least risk to you…and the  least risk to you means more risk for the seller, and in a seller’s market, that’s not great for getting your offer accepted. So keep those things in mind as we go over options. 

Number 1 for buying and selling a house at the same time. The old standby: Making an offer contingent on selling your current house. 

Several years ago, this was a tried-and-true method of buying and selling a house at the same time. You found a house you liked, made an offer contingent on selling your current house, put your current house on the market, and then closed on both houses at the same time or very close to each other. This is the lowest risk and cost to you as there aren’t additional loan fees, you get to find your new home first, and you don’t have to find interim housing. 

This is the highest risk offer to the seller as it may take you a week or two to get your home ready to sell, a week to get an offer, and then if that offer falls through, the sellers are back at square one, lost time on market, and usually value in the home as well. 

In our current market in Boise, a contingent offer is incredibly hard to get accepted, if not impossible. Even if a seller doesn’t currently have multiple offers, they know they will receive a strong, non-contingent offer if they wait just a bit more, so there is not much incentive for them to accept a contingent offer. 

There are some exceptions. 

In the off chance you find a home that has been on the market for over a few weeks and the sellers are motivated, they will possibly accept a contingent offer. 

Occasionally, builders on new construction will accept contingent offers, especially if the new home won’t be completed for several months. 

But in that situation, expect that the builder will put parameters and timelines on when you need to have your house sold, and that may include having it sold before you can move in the new house, then where do you go? We will talk about that in a bit here. 

If you absolutely MUST make a contingent offer, you must do whatever you can to eliminate risk to the seller, which puts you more at risk, and you must offer something so great that they would rather wait for your house to sell than accept a non-contingent offer. 

Now, that is very rare, but I did have a seller accept a contingent offer over a non-contingent once, even in our crazy market, and here is why...

The contingent offer was high, about $30,000 higher than the non-contingent offer. The contingent offer waived the appraisal contingency, they agreed in writing that they would have their house on the market in a week and if they didn’t have an offer in 2 weeks, then they would forfeit their earnest money. So the sellers I was representing felt that earning the extra $30,000 would be worth the risk of the 2 week wait to see if the other house sold, because if it didn’t sell, then the sellers got to keep the earnest money as well. 

But that risk to the buyer was pretty big…what if they didn’t sell their house in 2 weeks? They would have been out $10,000 earnest money and the cost of inspection. They were confident they would get an offer, and I actually was very familiar with the neighborhood the buyers were coming from in CA, so we were more comfortable knowing that the home the buyers were selling was in a highly desirable area. 

So, if you are making a contingent offer, be prepared to put things into the contract to pay more money and put yourself at risk financially in some ways, still having a very hard time getting the offer accepted. However, you do lessen your risk of having to pay for a different financing option or finding interim housing.

And of course, the closer you are to having your contingency lifted, or to your house being sold, the more likely a seller is to accept your contingent offer. For example, I have had several clients have contingent offers accepted when they are only about a week from closing on their house they are selling.

But how does that work? They obviously would need a place to stay as the next closing won’t be for 30 more days Well, that leads us to number 2 on the list.

Number 2 for buying and selling a house at the same time: Selling your home first and asking for a rent back time period. 

This is very common when buying and selling a house at the same time. Essentially, you list your home and disclose that you would like a 60 or 90 day rent back, whatever is doable and common in your area. That way, you free up your money when you close, can make an offer here non-contingent, and then not have to find interim housing. Sellers of a home in Boise see that you are making a non-contingent offer and you are off to the running. Or, as I alluded to before, you can make an offer when your current home is very close to closing, and many sellers are okay with that, and then you have a place to live while you wait for your Boise house to close. 

The biggest risk to you in this situation is that you have given yourself a time frame in which to find a new house. So, you basically are betting on finding that new home within 30 days or so and closing in another 30 days. With our inventory being so very low, this can be a risk as a home you like may not come on the market in that time frame. 

It’s better if you are looking for something that is more common, closer to our average price point, which is inching towards $600,000 or above (early 2022), and if you are willing to pay to live in an Airbnb, or maybe live with family in case the timing didn’t line up right. Also, there is a risk when you list your house that you cut out buyers who don’t want to give you a rent back time frame. 

But overall, this scenario has worked out quite well for my clients that have chosen the selling with a rent back option.

Number 3 for buying and selling a house at the same time: A second home loan.

Remember how I mentioned that you are trying to solve the problem of getting money freed up for a down payment and minimize finding interim housing? Well, what if you either have the money for a down payment saved somewhere else, or can get if from somewhere else? That’s where the second home loan option comes in. 

Now this takes careful qualifying from your lender as they will basically have to approve you to carry both debts of both homes for a while…and you probably don’t want to pay 2 mortgages, but it wouldn’t be for long. There are a few ways to do this.

Firs, use savings from elsewhere (but think twice before using it from a retirement type account that will hit you hard on taxes), but maybe you have 20% down saved in your savings. You can use that for your down payment, purchase the new home as a second home, then sell your previous home when you are ready, then refinance it all with the proceeds from the new home. This eliminates the risk of giving yourself a time frame to buy a home and of paying for interim housing, but as with all things that eliminate your risk, it will cost you more money. A second home loan mortgage rate has gone up quite a bit this year, so until you refinance, it will be a higher interest rate. You will also pay closing costs on the second home loan, and then closing costs again when you eventually refinance. It can be very costly but may be worth it if you are worried about interim housing or being rushed to find the right house or settling for a home you don’t love because you have a time limit.

Second, if you have enough equity, you can get a HELOC, or a home equity line of credit, against your first home to make up your down payment on the next. This has to be done before you list your house for sale, and it can take several weeks to fund. But then you can use the money like cash, you will have to begin repaying it as soon as you use it, and then you get the second home loan. The same risks and benefits apply as the scenario I just talked about. There is a benefit for a HELOC for another scenario. I’ll talk about in a minute. 

Third, and then, similar to a second home loan, would be a  product like a bridge loan, where the lender uses the equity you have in your current home as collateral against the home you are purchasing, you can make an offer non-contingent, it is only one loan, there is not a second  refinancing with it, and you can purchase the second home as a primary residence, so you get a better rate. However, it is very expensive with fees, and if you don’t sell your home as planned, you are stuck paying for the debt on both homes and it is very costly. 

So obviously for all of those options, you must be able to qualify for the debts of both homes, or the homes and the HELOC, and feel that you’d rather pay the fees and rates instead of taking the risks of the other options. 

So what if you can’t qualify for that much short term debt, then what? 

Number 4 for buying and selling a house at the same time: Take a leap of faith!

I have also had many clients choose this option. They take a leap of faith, sell their house first, then move to Boise into a short-term rental, an Airbnb, etc... and then take their time to find a house here and be able to make a non-contingent offer. So, in this scenario, you save yourself the cost of the fees for second home loans and such, BUT you pay for a rental, and rentals in Boise are in high demand and hard to come by. You will pay much more for a short-term rental.  Expect about $2500 month for a 3 bed 2 bath small, short-term apartment and minimum $2800/month for a small, short-term home. 

But You have to pay to live somewhere anyways, so you are either paying your mortgage or paying rent, so it’s not a total financial loss, but it is a few months of paying someone else’s mortgage instead of your own. 

So this is what my family actually did when we sold our house about 10 years ago. I know, it was a buyer’s market and totally different but because of it being a buyer’s market, no one would have agreed to a rent back on the sale of our home, and we didn’t have money elsewhere for a downpayment, and we wouldn’t have qualified for debt on 2 homes.  We also wanted the freedom to really decide where to settle down in the valley and put in roots. So yes, we paid for a 6 month rental and moved twice, and we found our new home about 3 months into our contract with our rental, but we found someone to take over our lease so we didn’t have to pay for rent and a mortgage. My kids were 5, 8, and 12 at the time, and we moved to a totally different area of town, and they weathered all the moves and changes just fine. We looked at it as a fun new adventure. And they really think it was. 

Number 5 for buying and selling a house: Back to the HELOC

For those of you who would pay cash if you could get the equity out of your house…back to the HELOC...if you have your home paid off or significant equity, you can get a HELOC...again, before you list your home, and if you find a home that costs under the amount of your HELOC, you can make a cash offer. Yes, you will have to pay your HELOC payment as soon as you use it, but it is usually interest only, and you would only make that payment until you get your other home sold, and then you pay off your HELOC. You also need to be aware of all the fine details for your HELOC, but I have had clients choose this route, and it works well for those who want to pay cash without a contingent offer.

Of course, there are more ins and outs to all of these options, and variations within them all, and all of them take some counseling between your whole real estate team, which would include your listing agent, your lending team, and your buyer’s agent, so that you can find out which options you qualify for, and which options are best for you. 

Okay so as you can tell, the less risks to you, the higher the financial costs, and overall, we want to try to find a good balance of risk to you and lessening risk to sellers. But selling a home and making a big move takes sacrifice and determination, but it’s worth it...eventually.  

Education and preparation are key to a successful experience, and my team and I are here to help you gain all of that as you prepare to buy and sell a home in the Boise area. We have great lending teams we work with as well as referrals to listing agents all over the country, so let us know if you need assistance with that as well. 

Deciding to move is a big decision and although we can’t eliminate all the stress, we can help you find the best solution for you to make the plan to sell your home so you can buy in the Boise area. 

Want to know how to win a bidding war in Boise? Find out here!

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