Getting Creative in a Tough Housing Market

Published by julia | Filed under Buyer / Seller Tips, Market Trends, Miscellaneous, Real Estate

You know, when things are doing the opposite of booming, it is easy to get bogged down by what’s going wrong.  That is true of life in general, not just real estate.  Here is an example of some folks putting their heads together and coming up with a plan to make things go right.

Realtor has two similar sellers.  Both are young families and both are on the verge of upgrading and bettering their situation.  Both will also become the Realtor’s buyers if they can ever get their houses sold.  Both sellers’ houses are gorgeous.

Seller Jim has a buying budget of mid 200,000s.  His house is listed for $140k, has many updates, a finished basement and a freeway running through his back yard.

Seller Bob has the most pristine house on the block.  Too bad the $40k steal is deep in a neighborhood of rentals where no one wants to buy.  His buying budget is $140-150k.

Both clients have fallen in love with, and lost, a few houses.  They both had potential buyers that fell through at the last minute.  Both clients have contemplated buying without selling and paying for two houses.  They both had the ability to do so but ultimately decided against it.  Until one day…

It occurred to the Realtor that although Jim wasn’t comfortable with the monthly payment of carrying the two mortgages of a new $250k house and the current $140k house, he might be comfortable carrying two mortgages equaling his $250k shopping budget.  She asked Jim if she could put together a situation of trading homes with someone who has a cheaper house that could possibly be rented out, and finding one for him to buy that didn’t surpass his budget when combined with the smaller house, would he be interested.

Jim thought she was crazy and threw silly questions at her to make fun of her idea.  But her answers actually made sense and Jim ended up loving the idea.  You can probably guess what happened next.

Jim bought Bob’s immaculate little rental house for $40k which freed Bob up to upgrade and start his new life.  He bought Jim’s $140k house, of course.  This made it possible for Jim to buy the house of his dreams.  His Realtor contacted the agent of a house Jim liked months prior, explained the situation and asked if that seller would be open to dropping his $220k house down to $205k, keeping Jim in his budget of $245k.  That seller having been on the market for over a year jumped at the opportunity and moved on comfortably to whatever he had going on.  Now Bob, his wife and new baby are settled into a better neighborhood and school district.  Jim and his family got their big house in the country AND a fabulous renter for the little house.  And the Realtor DOUBLE- double dipped plus one.  Not a bad day for a sluggish market!