The cost of moving, house buying & selling

I’m considering moving, not to a different location, but rather simply upgrading the house so we have more room for my expanding family. I’ve been pondering though that before the housing bubble burst, it was much easier to move from one house to another. You could sell your current house, and use the equity to cover the costs. Savings were needed (but not very much really) for the downpayment on your first house, but unless you needed to move really quickly, you shouldn’t have needed a ton of liquidity to move after that. Correct?

Anyway, to get to my question, what kind of savings do I need to sell my house and buy another one? Because I bought my first one as part of a corporate relocation, I was sheltered from some of the costs of buying, so I don’t know as much as I should. It looks to me like I would need to save for:

  • Delta between my mortgage and what my house .will sell for (since I’m still underwater). I’m going by Zillow now, but I suppose I need an estimate from a realtor to really know
  • Percentage of price of old house to realtor. What is that, 3%?
  • Percentage of price of new house to realtor. 3% again? Could that be tacked onto the new mortgage?
  • Cost of movers. What would they go for if its a local move? (furnishings for an 1800 sqft house)
  • down payment on new house. What do they demand these days if you have excellent credit? Is it back to the traditional 15%? Could I get away with 5% and mortgage insurance?
  • cost of any upgrades or changes to the new house
  • If I wanted to buy a new house before selling the old, I’d have to consider the double mortgage and maintenance during the overlap. Which seems like a bad idea not knowing how long it will take to sell, but has some advantages too.

Have I captured this accurately? I’d love to take advantage of the great prices and low interest rates, but the liquid capital I would need seems onerous.

A couple of things you are missing -

Closing costs on a new mortgage. We’ve bought/sold several times, and refinanced several times, and we assume 2.5-3% of the mortgage principle.

Generally, you pay a realtor that sells your house 5-6% of the selling cost, and they handle splitting that with the buyers realtor. You do not make a payment when you buy a house. Again, that’s coming out of the pocket of the seller.

Costs to get your current house to a selling ready state. That may be nothing, if your house is in really good shape, or if you don’t want to do any work. It may be more than that, if you have say put off replacing the living room carpeting and you decide it’s worth it to replace before you put the house up for sale.

Realtor’s commissions are negotiable. Try for 4% total, with a 2% sub (selling Realtor’s payout).

If you don’t sell your old house before closing on your new house, you can get a “bridge loan” in the intermin.

As far as moving costs go, I worked for a company back in the mid 90’s that charged by hundredweight and distance, with extra charges for packing (which was obscenely expensive), long carries, stairs, and a couple other things I can’t remember atm.
Size of the house really doesn’t matter, i’ve move large houses that had only around 10-12,000 lbs and small houses with 17,000 or more lbs of stuff.

If you can pack well and have the time/energy, you can save a LOT of money doing your own packing. You can save even more if you can get 5-10 friends and a rental truck to do it for you, but they won’t be as careful or work as hard as professional movers.

My advice is to contact multiple moving companies in your area and ask for quotes. Get separate quotes for packing and shipping. My first move, I called my former company and was quoted $800 for a small apartment move of about 15 miles. I found another company that would do it for $300. So there can be a huge difference from one company to the next.

To help you on your term paper, here you go…
–Delta of underwater price: depends on the area where you live, if in the mid-west, the delta may be zero, if in Cali, AZ, FL, NV AND bought in 2006 it could be as high as 50% of your loan.
–Sellers Commission Costs: standard is 6%, taken out of the seller’s proceeds. Closing costs, figure 1.5-2.5%
–Buyers Commission Costs: zero; buyers closing costs, figure 1%; yes some lenders will let you roll it into the loan, but you will need at least an 80% LTV ratio.
—Local move: 1500 to 3500, if you pack it yourself, otherwise double that; also movers charge by weight AND volume (cu ft). Call the majors names and ask them, they will tell you typical ranges, pick the middle of the three estimates and use the upper range. Then add 10% for “supplies” as this is NOT included in their estimates.
–down payment…if you have spotless credit AND are buying in a NON Tarp area you may get away with a 15% down, otherwise plan on 20%. There are some Freddie/Fannie REO deals out there for 3.5% however. Check their websites for properties.
–cost of upgrades to new house…huh? Real world–get a contractor to come in and give you an estimate, but for your term paper plan on 10% of the purchase price, but it is open ended. Some Freddie/Fannie properties include cash to the buyer for upgrades/refurbishment.
—yes, you CAN get a bridge loan, but why would you want to? In this time of tight credit, bridge loans are very difficult to get–and if you already have a liquidity issue you will not qualify.

Is there also stamp duty/transfer tax to pay on the value of the new house? Here in the UK it is between 0% (for houses under £125,000) and 7% (for houses over £2m). On, say, a £300,000 house you’re looking at 3%, or £9,000, which goes straight to the government. :frowning:

What is the true cost of leaving when you move to live in a new city or a new state? There are obviously many factors, but even just looking at housing costs alone, you will see that there are hidden costs to consider. Whenever you are moving, there are some expenses that come up that you forget have to get paid. One of those is a moving truck, but you need it because you cannot start the brand new job until you have relocated. In case you are in this situation, or any financial emergency predicament, you can get a payday cash loan to help pay for the moving truck and repay it when your job starts. Find out more at: Payday Cash Advance