Chris Word

Rgr,
I think you may have more than the option you've outlined:

If you've owned the home you're in now for a while, you might have equity for a loan that will put you into a 20%down position. So, that means if the value of the home you are in is higher by a significant amount than the loan you're paying down on, then you should be able to take the value of the home in a home loan, use it for the downpayment on the new property and go from there.

Another option is to sell the home you're in now. Again, this is favorable if you have good equity in your home. It would take time to sell your home, depending on the neighborhood and condition of the property. I would say though, that once you sell it and get the proceeds from the sale, your position might be pretty good at that time. It all depends and you'd need to talk to a financial advisor to see what all the benefits are. I know that if you sell the home you're in now, you won't have to worry about managing the tenant that moves in.

And of course, you can keep the property you own now, rent it out and use it to help pay a mortgage. This allows you to hold on to a valuable home, while living in a condo of your choice.

Can you get a 5% or 10% loan? The short answer is yes you can. The long answer is that not a lot of people are being awarded such loans right now. You can go the FHA route, but that will also take time, and you will have to be precise with whatever they ask of you - not to mention that the property you buy has to be approved by FHA. You'll have to Mortgage Insurance and there are many ways to do that as well (like paying it all up front, or paying it monthly with the mortgage, or deferring it until you sell one of your properties - all have pluses and minuses regarding taxes and how you can take them as deductions). Talk to a mortgage professional as soon as you can.

Chris. - Tue Sep 2 2008, 11:21

Alan, I think I can help you understand where you stand in a purchase transaction of a home. There are two sides, generally: the Buyer and the Seller.

The Seller does and pays for the following things when selling their home:
Repairs necessary items on the home, and pays for them. Updates things around the home, and pays for them. Hires a cleaner to clean the home, and pays for them. Hires a Realtor to market the home, and pays for those services (only if the home sells, though, and thru escrow). Hires contractors to complete a pest report, or a contractor's report, and pays for them. Upon the sale, has to pay the county transfer tax and any pro-rated taxes on file. The seller sets his price in line with the prevailing market conditions, and may be able to have a return on the sale of his home to offset the above expenses.

The Buyer has to ask a Realtor to help with a search and tend to the transaction once you write a contract to purchase. The Buyer has to pre-approve for a mortgage. The Buyer has to pay closing costs and pay for the list price agreed on between him and the seller. The Buyer closes and moves in.

When you, the buyer, pays for a home, you give the money to the seller. The seller then has possession of the money, and uses it to pay off anyone listed on the HUD-1 statement through the escrow process. This includes the Realtor, the Title company, and any other fees billed to the escrow (sometimes you can bill certain inspections and reports to the escrow account), and any taxes that he owes. - Fri Aug 15 2008, 18:01

Paying your realtor's fees outside of escrow invites a lot of game playing to go on in purchases as large as property - especially in the Bay Area. What you are suggesting is the very mechanism that predatory businesses use to accomplish a goal aimed at passing money along without oversight. You have to take into account that the transaction also affects lenders, insurers and banks - the most regulated industries in our country when it comes to how they handle finances.

As a Buyer, you really don't have too much recourse into what happens to the commission, since the realtor's agreements on payment are made with the seller. A buyer is not party to a listing agreement, so has no influence on how the commission is handled.

You might want to talk to an accountant to find out if you have any advantages or deductions coming to you when you sell your home - to include an investigation as to how your fees are considered by the tax codes. - Thu Aug 14 2008, 15:12

Resale value of a home can suffer if construction or additions were completed without the benefit of approved and completed building permits by the City of San Francisco. As a buyer, you will have to make sure that if you like the way the home is being used, or the way the rennovations or additions were completed, that the seller has declared that the work was completed without permit and that the seller hired state licensed contractors to complete the work - they are supposed to follow building codes in their work. State licensed contractors are also supposed to warrant their work and can be called back to complete, improve or refinish work that is determined to be out of code or otherwise. If you buy a home with non conforming uses, or with work done without benefit of permits, you should choose to have an inspection done by a contractor to check the work. Agents in San Francisco know the inspectors that will give the property close scrutiny. Hope this helps. - Tue Aug 12 2008, 10:28

Jenny, I would think that your complaints, especially about forwarding confidential messages to the seller, need to be addressed to the Broker,or Sales Manager of the firm you're dealing with. Make a stink about it because it's wrong; the agent is wrong; and it is because of these very acts that our industry and people in it pay with a bad rap. Not all of us are doing these things, but the few that do really color the big picture, don't they? Once you've addressed this to the Broker, I would think that he would want to negotiate with you any terms that he can with the seller. Perhaps there's room to ask the Broker to reduce his commission against the sales price. This is a bad situation, going into litigation with it will simply eat up resources, time and money. Make the situation pay for you, if you possibly can, before you take any long involved process. - Fri Aug 8 2008, 19:01

Kathleen, the value is, like many other variables, based on the individual characteristics of the subject property. In and of itself, detached versus attached may not be the strongest factor in owing a home in San Francisco. For instance, a block of homes that are all detached except for one home (lets say on the corner) might reflect similar values for all the attached homes, but a higher value on the one detached home. This is, of course, given that the detached home is in similar or better condition that the rest of the row of attached homes. However, again, if one of the attached homes has an unencumbered view, and has fit and finishes that clearly outshine the one detached home on the block, then the factor of attached versus detached becomes less of an important value - generally. - Fri Aug 8 2008, 12:27