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MLS Market Snapshot
Questions I Am Often Asked...Providing financial information related to selling and/or buying a house is a basic service of REALTORS®. The finances connected with selling your present house with plans to buy another house has a direct effect on how much you will be able to spend and the size of your future mortgage. For this reason, the transaction is one of the most important financial considerations within a family. The following questions deal with aspects of such a selling/buying plan.Question: We want to sell our house and apply some of the profit to purchasing a larger house. Do we talk to a REALTOR® or should we discuss this with a lending institution? Answer: Serving as your REALTOR®, it would be my responsibility to provide your family with a wide range of services, including financial information. This information includes calculating your current home equity -- the difference between the value of your house and the balance of your mortgage. This is part of a comprehensive market analysis I use to initially determine your "profit" after the sale of the house. Pricing is an important part of selling the property. This includes -- but is not limited to -- knowing the selling prices of houses in your area. With this financial analysis we can discuss the future plan of buying a larger house. You would have a good idea of what you could use for a down payment. Also, we could determine a reasonable mortgage payment based on the monthly family income. Question: I understand the role of the down payment in financing a mortgage, but what is "earnest money" and who gets it? Answer: Earnest money is the initial cash deposit given by the purchaser to the seller as a sign of good faith. It is held by a third party in an escrow account. It is used later as part of the down payment toward the purchase. The amount of earnest money that a purchaser and seller decide on is negotiable. Earnest money is expected to compensate the seller (and possibly the real estate broker) if the buyer defaults on the contract. There is no specific rule requiring a certain percentage of earnest money but the normal range is anywhere from $1000 to 5 to 10 percent of the purchase price. Question: When selling a house with plans to immediately buy another house, is it best to sell first and buy later? Answer: The selling/buying plan requires a kind of "juggling act." If you sell first, you are certain about your equity and profits from the sale, but you may need interim housing -- usually a rental space -- until you buy your next house. The clue is to weave the two plans together. Please call -- we can discuss the various options. Question: Can a few percentage points of interest really make a difference on a 30-year mortgage loan? Answer: The amortization payment chart below compares costs. The message is clear -- there's a big difference!
Amounts are to the nearest dollar. |
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Susan Herlong, ABR, CRS, GRI
herlong@tucsonaz.com
Phone: (520) 544-7407
Mobile: (520) 297-4600
Toll Free: 1-888-SUE-SOLD
1-888-783-7653
RE/MAX All Executives
7090 N. Oracle Rd., Suite 160
Tucson, AZ 85704 USA
[Tucson Arizona, RE/MAX All Executives: Susan Herlong is a real estate professional with RE/MAX All Executives in Tucson, Arizona. Superlative service, integrity, and professionalism distinguish Susan Herlong as one of Tucson's outstanding real estate professionals. Susan Herlong has the knowledge, experience, and commitment to satisfy the needs of both buyers and sellers. Tucson, Arizona offers a wide range of housing choices from family homes to ranches and estates. Architectural styles vary from Spanish to traditional to contemporary.]