If you will be selling your home to buy another, there are a lot of numbers floating around....

• what you'll sell for
• your closing costs when selling
• your mortgage payoff
• how much you'll pay for your new home
• how much of the purchase price you will finance
• how much your mortgage payment will change

Above you will see a spreadsheet I put together to help you think about some of these numbers as you are evaluating if and when you will make a move to a new house.

In yellow, are all of the inputs you will need to provide, or that you and I can determine together, such as your current payment, your home's current value, your mortgage payoff, whether you will be putting any additional money into the transaction, etc.

In green, I have identified your potential future mortgage payment and the net change in your monthly payment.

All of the numbers without a background color will automatically calculate for you.

Click here to download this worksheet as an editable Excel file.

1. They are done negotiating on price and want it to be very clear that they are not going to negotiate further on price based on whatever you might discover during your home inspection.
    
   
2. The house is old, and the seller doesn't want to deal with repairs requests that are mainly related to the fact that the house is old.
    
   
3. The house is unfamiliar to the seller, perhaps because it has been a rental property, and thus the seller hasn't been making small needed maintenance upgrades over time that only an owner occupant would now about --- and thus the seller doesn't want you to nitpick over those details through the inspection process.

1. Fannie Mae does not specifically require that a bedroom have a closet.
    
2. The Dictionary of Real Estate Appraisal does not have a standard definition of a bedroom and points out that local codes define bedrooms.
    
3. The HUD Handbook requires that bedrooms provide a means of egress to the exterior of the home -- and require that a basement bedroom's window be no more than 44" above the floor and should be at least 24" x 36" in size.
    
4. Homes built long ago (pre-1900) are not likely to have closets -- and appraisers sometimes must consider the intent of a room regardless of whether a closet exists.
    
5. Bedrooms should be accessible via  hallway or living space -- so bedrooms that are only accessible through other bedrooms are not really bedrooms. 
   

Wow.  OK.  Lots to consider there.  So -- the short answer is that you can count your bedrooms based on whether they have windows and closets -- but it may require a bit more thought and analysis before we decide how many bedrooms we'll say that your home has when we put it on the market.

Oh, and two final notes....

1. If you live in the County, in a home with a three bedroom conventional septic system, and with five bedrooms with closets and windows -- we might still need to call it a three bedroom home!?!
    
2. Appraisers actually look at above grade (non-basement) and below-grade (basement) bedrooms differently.  So, if your home has 2 bedrooms on the first floor and 3 more in the basement -- it won't necessarily be able to be compared to a home with 5 bedrooms on the first floor.

• your home's value goes up much more than expected during that time frame
   
  
• you have little to no maintenance costs during the time that you own the property
   
  
• you decide to keep the property as a rental property and thus do not need to factor in the cost of selling the home

1. Obtain a pre-approval letter from a lender.
    
2. View the property.
    
   
3. Ask follow up questions of seller.  (utility costs, age of house components, reasons for selling, motivation level, timing logistics)
    
   
4. Research comparable sales to determine market value.
    
5. Research restrictive covenants, deed restrictions, septic system details, survey, etc.
    
6. Discuss negotiation strategies.
    
7. Determine main terms of offer.  (price, timing, contingencies)
    
8. Draft and review offer documents.
    
9. Sign (in person or electronically) offer documents.
    
10. Submit offer documents to the seller and (patiently?) wait.
    

• Your Full Name:
  
• Your Current Address:
  
• Personal Property to Convey:
  
• Offering Price:
  
• Type of Financing: LTV: Rate Cap:
• Earnest Money Deposit:
• Request for Closing Cost Credit?
• Financing Deadline:
• Settlement Date:
• Home Inspection? Radon Inspection?
• Inspection Deadline:
• Do you want to purchase a home warranty?
• Other Terms?

Keep up with new listings at ...

• At face value, the number of homes for sale under $200K has declined 47% over the past year.  Ouch!
   
• Each data point shows the average number of homes for sale in the given price range over the previous 12 months.  As such, the "49" homes for sale reported in May 2020 means that in the 12 months leading up to the end of May 2020 there were an average of 49 homes on the market at any given time.  Looking at these numbers as an average of the past 12 months eliminates some of the month-to-month volatility in inventory levels and allows us to more clearly evaluate long term trends.
   
• This doesn't mean that 47% fewer homes are selling under $200K - it is just looking at active inventory once a month throughout the year.  If 800 homes under $200K were listed for sale on Tuesday of this week and were all under contract by Wednesday of this week, the inventory level would stay the same, despite the fact that there were LOTS of homes available to buy. 
   
• This does mean that buyers buying homes priced under $200K in the current market have fewer and fewer choices at any given time and they also have more and more competition from other buyers.

• At the end of May, the YTD pace of buyer activity for 2020 was 5.49% behind where we were a year ago.
   
• As of yesterday, June 11, the YTD pace of buyer activity for 2020 was only 3.44% behind where we were a year ago.

• Many segments of our local market are significantly undersupplied -- so as to say that there are many more buyers than sellers in the market.  Thus, there are often lots of early showings and multiple offers.  So, the main reason why a full price offer is not winning is because we're competing with other motivated buyers.
   
• We can likely conclude that the other buyers made offers higher than the asking price -- or with an escalation clause which would automatically increase their offer above competing offers.  So, it may be simply a result of being outbid.
   
• Some buyers are strengthening their offers by removing some "normal" contingencies -- such as the home inspection contingency, or the appraisal contingency.  This doesn't necessarily make sense for most buyers to do, but it is something that we can discuss.

• The closing for both will be on the same day.  Let's say it's a Friday.
   
  
• You'll have to be out of your current house by the evening before closing (Thursday evening in this case) so that you can close on the sale of that house the following morning (Friday morning).
   
• You won't have access to the new house to move your belongings in until after you close on Friday afternoon.
   
  
• So, where are your belongings going to be from Thursday evening until Friday afternoon?  And where will you be?

• Work with a moving company that is willing/able to load you up one day and not unload you until the following day.
   
• Ask the buyer of your house if you can retain possession of the house for a day or two after closing to get things packed up and moved out after closing.
   
• Ask the seller of the house you are buying if you can have early possession of the house for a day or two before closing to get things moved in before closing.

• has been prepared quite well for the market
• has excellent photography that shows the house well
• has a realist asking price

• A seller would almost never accept a contract with a home sale contingency without a kickout clause to allow them to move on to a different buyer that didn't have a home sale contingency.
   
  
• There are only 5 properties in the MLS that are under contract with kickout clauses.

It would seem that most buyers are likely waiting to make offers until they have their own properties under contract (thus eliminating the need for the kickout clause) AND/OR most sellers are not accepting offers with home sale contingencies unless the buyer's house is already under contract (thus eliminating the need for the kickout clause).

If you are a buyer, I would certainly suggest the strategy outlined above (and the only one that is apparently working with sellers right now) --- get a contract on your house and THEN make an offer on the property you would like to purchase!