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Question
Hello-
I just had a question about the costs of upgrading to a new house when you outgrow your current one. We have been in our house just about a year, but feel it may be too small soon (more kids coming) and we may need to get a bigger one is a few years. We bought it for $200,000 and put $40,000 down. I am just wondering about estimated cost if we were to get a new house after such a short time. Say we found another house for about the same price or slightly higher. Would the estimated realtor fees of, say $10,000 (5% of the purchase price) and the estimated $4000 closing costs on the new house have to be paid out of pocket, or would they be part of the new loan that we get? Does having more equity in the house make the costs of getting a new home lower? We don’t have a lot of money so just trying to figure out how expensive it will be. Thanks for your help!
Hi Lisa,
Congratulations on the expanding family... the price you would get for your current home is all determined by the current market value in the area of the home. Adding amenity does not guarantee you will get more money for your home...
Closing fees to the current home will run 6.1-7.1%+ there are commissions and closing fees, along with possible buyer concessions that will need to come off the top of the purchase price.
The new home will again have lender and closing fees to secure. A completely separate transaction.
You can always try and incorporate the closing fees into the loan structure with your new purchase, check with your lender on that.
Having more equity in the current house will have no effect if you are selling it to buy what your loan configurations are other than you don't have to bring money to the table to close that transaction.
If you are keeping the house and making it a rental, then there are an entire set of different conversations you will need to have with your lender for the new home purchase... and restructure so that you have an income property and secure an owner occupied residence loan on the new home.
Good luck!
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Connie Wildasinn-Broker,GRI,Realtor®
Expertise
Broker,GRI,Realtor®, Investor since 1979. Buying or Selling Residential and Income/Investment Properties, How to understand the process, how to negotiate through the transaction, What to Look for - But more importantly 'What to lookout for!', How to tell if the time is right - or hold on and wait. Why not to listen to your friends and even your family members, Who really has your best interest at heart?. Understand why any market is a good market and how to spot a good investment for you! If you are looking in California.. check out my website www.MetroCalBrokers.com and if you need assistance in a neighborhood I don't service, I will locate a local agent to that area who actually knows their profession and can assist you in your needs!
Experience
4th generation Realtor in the real estate business, I have helped for over 2 decades clients buy and sell, I am the owner of a local brokerage in the Los Angeles /Long Beach area, and have been a top producing agent in the area since I became licensed. Working through a deal is different to every client, no two people or deals are exactly the same. Knowing how to bring professional advise to the table with clear and concise understanding of real estate world. I can help you handle your buying, selling and investing, managing a 1031 Exchange, working with Equity Sales, Probate, Pre-Foreclosure Regular and Short Sales there is little that I have not seen come across my desk over the decades!
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Broker-owner,
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