quote:

Originally posted by PHPaul:

quote:

Originally posted by TXJIM:
Open a home equity line of credit on the existing home. Use the funds to pay for the new construction on a specified draw schedule per the new builder contract. You will only be paying payments on the portion of the funds that have been used, so your “rent” will be very cheap at first then slowly go up as you take more funds out as the build progresses. When you are 60 days out from completion put your current home on the market. When it sells, use the proceeds to pay off the equity loan and pocket your remaining equity. No moving twice and unlike rent payments, the interest on the home equity line is tax deductible.

And if the house doesn't sell pretty much immediately, I'm well and truly screwed.

Two things to keep in mind here:

1. I live on <$4000 per month. A $1000 per month rent/mortgage payment is a non-starter.

2. I'm EXTREMELY risk-averse.

Paul, IMO you are wise to play it safe.
Having 3 houses built over the years I'd also caution you about building on land you already own with a contractor. The time we did that vs where they own everything until possession was a nightmare. Over the timeline and over budget despite a solid contract. Be very careful in your contractor selection. Nothing can force a scumbag contractor to honor his contract. He can go bankrupt and open up under a new business name. You might be able to get some legal relief eventually but that would be after you paid large legal fees and $ on your construction loan until you find someone else to finish it.

Paul I have been involved in similar transactions in both VA and NC. As was said above it is doable and as long as properly disclosed there should not be an issue.

I have two questions:

1. You said the zoning restriction would be lifted in August so how long will it take to build your new house going into the fall?

1. What do you have to loose by listing it with the parameters listed as discussed??

If you’re that close to Acadia NP you should have no problem getting some of that Boston money flowing into your bank account. Some people, particularly in New England find the idea of buying an old home “romantic”

I say go for it.

quote:

Originally posted by smlsig:
Paul I have been involved in similar transactions in both VA and NC. As was said above it is doable and as long as properly disclosed there should not be an issue.

I have two questions:

1. You said the zoning restriction would be lifted in August so how long will it take to build your new house going into the fall?

1. What do you have to loose by listing it with the parameters listed as discussed??

If you’re that close to Acadia NP you should have no problem getting some of that Boston money flowing into your bank account. Some people, particularly in New England find the idea of buying an old home “romantic”

I say go for it.

I'd plan on a modular. My daughter's house is a modular and the house itself is fine. She chose poorly when it came to a contractor (concentrated on price, not reputation) for the groundwork and foundation, and the outfit she bought the modular from needed to be ridden like a hobby horse to get anything done at all, much less on time. Even given that, it was only about 6 months from ground-breaking to moving in.

As long as the groundwork was done and the foundation/basement in before hard freeze (lately not until nearly February) the rest isn't weather dependent to any great degree.

Here is my two cents...

Not a RE agent, but do photos for listings and work with several. The only reason a house doesn’t sell is because it is overpriced for the current market.

Lots of folks think their house is worth far more than what the market or appraisers do. Most of the time these same folks who want $20-40K over value for the house they are selling expect to pay $25K or more UNDER market for their next house.

“I have to clear “X” to buy what I want” has no bearing on your current house value or what you can expect to sell it for. Market determines sale price, sale price and mortgage (if any) determines the net after fess and taxes.


Even well intentioned and knowledgeable agents will sometimes mis-read and overprice a house. When they do, it sits. Sometimes a problem isn’t obvious until a deal is in the works and an inspection reveals it.

We made an offer on a house a couple of years ago, full asking ($585K). We weren’t really looking to buy a new house or move, It was one I was hired to photograph and fell in love with. We rushed our house to market listed higher than I wanted to, but at what agent suggested. Lots of interest in our house, but no offers.

Meanwhile we had inspection on house we were hoping to buy. Needed a new roof, but more importantly the damaged roof allowed water intrusion that caused structural damage. So there was a big unknown to the extent of damage.

Sellers wanted to sell “as is” with a discount of half the repair estimate with us to do repairs after purchase. I countered that I would raise offer by half of $13K estimate to $591,500, but they had repairs done FIRST and they covered any cost over estimate. They declined and I withdrew our offer. In the end it ended up being a $20K+ repair. They had the repairs done, then raised list price by $25K, because they had to “clear” X amount on the sale to get the house they wanted.


That house sat on a hot market for over 3 months before they finally sold it. Sale price? $587K, just $2K over our original offer and $4500 UNDER my counteroffer with them doing the repair they ended up doing anyway. Also, due to the time it took for repairs and to sell, they missed out on the dream retirement home the had found and was bought by someone else.

quote:

Originally posted by 911Boss:
“I have to clear “X” to buy what I want” has no bearing on your current house value or what you can expect to sell it for. Market determines sale price, sale price and mortgage (if any) determines the net after fess and taxes.

Yes, I'm aware of that. My point was that I'd have the house appraised by a professional with out commenting on my goals. Then, if the appraised value wouldn't allow me to clear "X" I wouldn't put it on the market.

quote:

Originally posted by Aeteocles:
Sure.

Negotiated lease backs are a thing. At least here in California.

Here, in California, it's not even two separate transactions. There are pre written forms for it, so that the lease back is contingent on escrow closing, and rental deposit and rent can be paid out of the escrow proceeds.

Disclose it in the listing. Some people are turned off by the idea of being a landlord for 4-6 months. Others would jump at the idea of buying something now at low interest rates, and waiting to move in a few months when their own situation sorts itself out. For example, in the before times, people would happily lease back until the summer so they wouldn't have to pull their kid out of school in the middle of the year.

quote:

Originally posted by smlsig:
Paul I have been involved in similar transactions in both VA and NC. As was said above it is doable and as long as properly disclosed there should not be an issue.

I concur with the other poster's pre-sale disclosure.

My employer moves me every few years, and once I had the seller try this 3 weeks after accepting my offer which meant the home had already passed inspection, escrow had already accepted my earnest money, closing was in a few days, and my movers were arriving imminently. Even worse, the dipshits accepted my post inspection sales agreement, went on vacation without telling their realtor, didn't communicate with their realtor the entire 2 week vacation, and they made the request when they got back home . I told them "tough shit", closing occurred on time, and I moved in on the date planned. If it had been in the pre-sale disclosure then I wouldn't have made an offer since a delayed move in didn't work for me as I was moving 3 time zones.

Obviously, Paul is too squared away to be like my example, but I wanted to emphasize the point that not all buyers are in a position for delayed move in and the way it's presented affects the potential buyer's response.

From order to finish, how long do you think it will take to complete a modular?

You could put you home up for sale with two options: (1) closing not until 120-150 days which (assuming a modular can be finished on your lot in that time) allows you time to build. You'll have to pay interest only on a construction loan during that time but no rent. Potential buyers under this scenario could be those moving from a rental to buying or one who could use the 120 days to market their own home. When building a new home myself I did this, sold my current home to a young couple who were renting with the closing date for them guaranteed within 150 days (and I needed almost every day I think it was 145 days later). (2) Assuming they are willing to pay your price yet want to move in before you can complete your new home just suck it up and have your stuff moved to storage for a couple months while you live someplace temporarily.