Selling one house and simultaneously buying another can be a complicated, stressful, and difficult process in any real estate market. Most sellers are forced to list and sell their current home before they can qualify for the mortgage necessary to buy their next home. In addition, the down payment for their next home often comes from the equity they have built up in their current home. Furthermore, the historically low level of homes for sale that we have seen over the past 18 months in our local market makes it that much harder as many sellers are hesitant to list.
Think about it this way. With limited inventory, many sellers, who want to be potential buyers, elect not to list their homes out of the fear that their homes will sell before they find another home to buy. Conversely, they are hesitant to buy before they list knowing that, with so few homes for sale, their bargaining position as a buyer is weaker if their offer is contingent upon their current home selling. Furthermore, it a seller does simultaneously list and buy, they must then navigate back to back closings, forcing them to move out of their current home before closing, as they need the funds from closing for their simultaneous purchase.
To address this issue, Carolina One Mortgage, in partnership with Knock, allows you to reverse the historic process outlined above and buy your next home before you sell your current home.
Here is how it works:
Carolina One Mortgage will pre-qualify you to buy your next home. This is just like any loan application process. The difference is, because Knock provides you a "back-up" purchase offer on your current home, you can qualify for your new mortgage without having to sell your current home and pay off your current mortgage.
Make an offer on your next home. Since you are not constrained by the timing of an existing contract on your current home, you can wait for the perfect property to come on the market and have the ability to move quickly once it does.
Close on the home and move in. This allows you to move to your next house before you list your current one. Knock will also advance you, interest free, a portion of the equity in your current home which allows you to close.
List and prep your old home for sale. As you prepare your home for sale, Knock will loan you up to $25,000 for home repairs so you can ensure that your home will sell for top dollar.
Sell your home. At closing, Knock is repaid all equity advances and loans as outlined above.
Knock's fee for the services outlined above is 2% of the sales price of your current home. On a $400,000 home, that 2% would be $8,000, which is not an insignificant amount of money. However, in many instances a seller can reclaim some of this fee given the fact that they now have the ability to make a non-contingent offer on their purchase, can be flexible with timing, and have the ability, after they move out, to make their existing home show ready before listing, potentially increasing the listing price. Not to mention that there may be no other way in this market to find the home you want or need and make the move without it.
I can advise you as to what might work best given your situation and, if this or one of our other programs is right for you, connect you with a Carolina One Mortgage loan professional.
