Tweeners, Beware! Avoid Jugglings Costs of Two Florida Mortgages

In the current Florida housing market, here’s a natural inclination: you wish to upgrade from your present residence to a nicer one because the latter can now be purchased at a reasonable price. Makes perfect sense. You should look into it.

But be careful: you’ll be acting as a seller, as well, in this equation. Consider the following steps in order to make sure you can sell your first home before closing on your second home. Otherwise, you could be stuck with payments on TWO Florida mortgages.

Sell First, Fall in Love Later: It’s hard to resist the bargains. There’s just so much inventory out there right now - but your best bet is to avoid shopping for a new Florida home mortgage until you unload your current home. Better to get the harder part over with first.

The proces of making an offer and finalizing a purchase will be comparatively easy in the present climate; in this market, there will always be another house to fall in love with anyway. Even if you have to live in a hotel while you look, you’ll likely come out ahead compared with carrying two homes.

Price Like a Buyer: If you can’t avoid buying before you’ve sold, however, there’s a fallback plan: sell smarter. According to Chang-Tai Hsieh, professor of economics at the University of California at Berkeley, the growth of tweeners is caused not so much by a lack of buyers as by the inability of sellers to accept that prices are falling.

Owners grow attached to their homes, he says, and they find it difficult to reduce the price enough to get buyers interested. “It’s not that you can’t sell; it’s that you can’t sell at the price you want.”

Therefore, you must think like a buyer when pricing your house. Start your research by visiting open houses of similar homes in the area. Consider not just what the house is listed for but what you’d offer for it. Apply that to your house.

Then cut your price by at least half of your potential carrying costs, suggests Chicago financial planner Richard Potter. To calculate these, multiply your monthly expenses by the average selling time in your area, which a Florida mortgage broker can tell you.

Leave Yourself a Loophole: Contingency clauses, which require the seller to wait until the buyer has sold his house to close, all but disappeared in the early 2000s. Back then most sellers had more than one buyer for a property, and bidding wars were common.

That’s not the case now, of course. Think about a clause such as this in your Florida home loan contract.