Buying a new house

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MusicalMan

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Hello Everyone

What is the normal process when you want to sell your house and buy a new house?

Let's say you apply for a bond for the new house, does the bank when assessing affordability take into account that you won't be paying the bond on the old house anymore?

Are you meant to sell your current house and then apply for finance for the new house - That leaves a sort of grey area in that, where do you live in the time between selling your current house and getting the new one.

Any advice on this?


Thanks
 
When you sign the OTP on the new house, you make sure to inform the agent that you are buying the new house on condition that you are able to sell your current house and this be included as a condition of purchase on your OTP.. the agent selling the new house would then be very eager to sell your house for you, for the commission.. this way, you secure the new house you want, whilst still having an out if your house doesn't sell for any reason.. there will be a time limit attached, within which your house must sell but, this would all be part of the OTP.. can't stress enough, how well you need to read OTPs and all terms and conditions..

Bank would take into account that you are selling the old house when doing their calculations..
 
WAslayer said:
When you sign the OTP on the new house, you make sure to inform the agent that you are buying the new house on condition that you are able to sell your current house and this be included as a condition of purchase on your OTP.. the agent selling the new house would then be very eager to sell your house for you, for the commission.. this way, you secure the new house you want, whilst still having an out if your house doesn't sell for any reason.. there will be a time limit attached, within which your house must sell but, this would all be part of the OTP.. can't stress enough, how well you need to read OTPs and all terms and conditions..

Bank would take into account that you are selling the old house when doing their calculations..
Click to expand...

Thanks
The seller of the new house would need to agree though, right?
 
MusicalMan said:
Thanks
The seller of the new house would need to agree though, right?
Click to expand...
Both the seller and buyer sign the OTP, so yes..

Doesn't mean they would not agree to it.. if your offer is reasonable, they have no real reason to say no, especially considering that they would still have some time as per OTP where they could accept any other offer they receive.. which again is why it's critically important to read the OTP..
 
Many factors will influence the sellers decision regarding agreeing to such. Eg if its an entry market price range <R1.5m, where there is more new owner buyers, or mid to higher bracket where their is less.

If their is other buyers with less suspensive conditions, eg not having to sell the house, it does count against you as the buyer depending on the property market you looking. Obviously in your instance, you need to stick to certain conditions when you need to afford the house and not sign an OTP and "hope" your house sells.
 
Ideally your actual application for the bond will only be after you try to purchase the new house, anything up and until then is just a guesstimate of affordability.

When you agree with the seller to purchase their house the OTP will state that it's on condition of you selling your previous house within X time period and pending an approval home loan to purchase their place.

This is why sellers will often take a cash offer for slightly less money as it's a guaranteed sale with no waiting period applicable.

You should also advise your bank sooner rather than later that you plan to sell so you don't get hit with any penalties on your existing home loan.

The sale of your old house should resolve the previous home loan which means you won't be straddling two home loans unless you specifically wanted to do this for some reason.

****
Also, ****ing necro.
 
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Shiven06 said:
When I bought my new house, I made sure to include a condition in the Offer to Purchase (OTP) stating that the purchase was contingent on selling my current house. It made the process much smoother because I didn't have to worry about being stuck with two mortgages.
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clown
 
Shiven06 said:
When I bought my new house, I made sure to include a condition in the Offer to Purchase (OTP) stating that the purchase was contingent on selling my current house. It made the process much smoother because I didn't have to worry about being stuck with two mortgages.
Click to expand...

Recently I heard about this scenario ....

An owner looked at a property, very much interested. He called the agent, agent said its still available.

He sold his house that afternoon. Calling the agent again, the property was sold.

That's reality of life. Be sure you know your "agent".
 
zerocool2009 said:
Recently I heard about this scenario ....

An owner looked at a property, very much interested. He called the agent, agent said its still available.

He sold his house that afternoon. Calling the agent again, the property was sold.

That's reality of life. Be sure you know your "agent".
Click to expand...
Problem is "agent". Bunch of snakes. Treat them as such.
 
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