So I've been living in the same 1 bedroom condo since I started law school way back in the fall of 2004.

Now that I am out of law school and married, we are thinking about getting a new home just in time as our ARM is about to expire in July 2009.

I financed it on an adjustable rate mortgage (ARM) that will have its rate adjusting beginning July 2009 - about one year from now.

Faced with an unpredictable rate adjustment, and the desire to move into something with more space, I am now beginning to look around for a new home.

I'm new to this game... any tips? should I look for a new home now? should I move out of my condo and think about selling it now while I live in an apt?

Thanks for any tips...

Whatever you do, don't go the two mortgage route. That is a recipe for bankruptcy and lots of heartache.

Unless you can afford two mortgages, I'd really work on selling what you have first. This might mean finding a place to live in the interim, but the good thing you have going for you is that today's market is fully a buyer's market, and financing into fixed rate loans is cheap.

Not sure what you got into your condo for, but since you bought in 2004, don't be surprised if you take a loss on it....at least try to get out of it what you owe. Of course, that depends on how the market is where you are.

I want to buy a house too SO BADLY but my condo value has plummeted and I won't make any money from it. I'm very sad. I just really wish I had a garage. But I got a storage unit for now - about a mile down the road. My office now houses my computer desk and my drum set and a lot of guitars and two amps. My third bedroom is my lil' art studio. But sooo cramped.

mb -- either sell your condo first or rent it out with a one-year commitment. This way it'll give you time to decide to sell it in the future.

The two previous posters have very good points. My wife and I were in a very similar situation, but had to float two mortgages for a while (my company moved us from VA to NJ, but due to condo problems that weren't ours, we couldn't sell our condo so we rented it. Then my company moved us from NJ to OH, where we bought our current place. As the HOA fees kept going up and the rent didn't cover that, we decided to sell. Offered it to the renter, she declined, and we had to do a bunch of work to make the place sellable with no renter there to offset the mortgage.)

So, THE key point that's bigger than anything else: Don't buy until you sell your old place. You can put most of your stuff into storage and get a short term lease on a rental to hold you over until you buy what you want. DO NOT do two mortgages.

That aside, if you want to sell a place relatively quickly, here's what we did.

• Get a very good realtor. We lucked out (we've had shitty ones and one really good one) and managed to get a strong realtor. What you're looking for is someone who knows the market (do your own research first so you've got the basics down and subtly quiz them to see if they know that and more), has a solid marketing plan to get your place noticed, and can work with you to identify what you need to do to get your place ready to sell.
• Get your place ready to sell. Even though your realtor should tell you this, you need to research and see what the condos like yours have done to them. If they've all got new countertops, appliances, and windows - guess what? Your going to need to have that or be significantly cheaper. If you've got a leg up in that you have that and they don't, you'll be able to price a small bit higher.
• Make sure you either owe less than 70% of what you're asking or you've got the money to short-sell. This may sound depressing, but we offered our place at $164K, were offered $142, and settled at $150 with a home warranty thrown in. Buyers are being instructed to offer 20% or so less than the asking price (market-dependent).
• Make sure your place is pristine. I'll be honest, having it vacant is best - but if it's not vacant, it needs to be pristine. New or like new paint (in neutral shades rather than bold colors). Remove a lot of personal things like pictures on the fridge, etc. Anything you can do to make the place look bigger by getting rid of clutter and knick-knack things is better. Get the storage unit and truck all that stuff out there. Remember that the buyer wants to imagine themselves there when it's "their space", not attempt to imagine themselves in your space.
• If you've got older used furniture, now might be a time to upgrade. Again, when people walk into the house (assuming it won't be vacant) they want it to look like a model house, not like you live in it.
• Depending on the average days to close and all the other cash you're laying out, it might be a good day to rent a place and move in there, leaving the place vacant. Sounds odd, but if you can afford it, that'll probably help the place sell more quickly.

One last blurb on this. In the DC metro area, where our condo was, we had new windows in the place, but the original stove, fridge, relatively new washer and dryer. We had done ceramic tile in the kitchen and bathrooms and the carpet was new. Our renter had painted some of the rooms rather bold colors and didn't ever deep clean. When we compared ourselves to the market, we realized that most places had new appliances and countertops. So, in a normal market, we're in a decent position as long as our sell price wouldn't have been too high. However, in our market, the prices had dropped by 50%. We could've sold the place for roughly $300K at the peak, but due to the condo association sucking my ass, we weren't able to. Now most places are being offered around $165-170, but they aren't getting that.
So, we put in a new stove and range hood, new fridge, painted all the rooms in a nice neutral color palette, had the carpet professionally cleaned, painted all the crown molding, baseboarding, the closets, and doors, and cleaned everthing else possible. We also had the AC unit blow up in the middle of this, so we had to replace that as well.

The moral? While not a single condo of the 7 others for sale in our complex, nor any other condo in the town, had sold in 120 days (and nothing is under contract, so they're moving to 150 days), we did all of that work and sold in 18 days.

Long post, but hopefully this helps get you a good idea of what you'll need to do to sell.

As for the buying portion, once you make it past the sell, no worries. Don't get all obsessive over a house. There will always be nice houses for sale. If you don't get the one you want, don't worry. There will be another.

If you read my post, that's why we sold. We actually lost money as of right now, but since the condo fees were rising but the rent couldn't cover the difference nor go up quick enough, we save in the long run.

Sucks to lose that much money, though.

Agreed on all but this. Save the 2.5 to 3% and go by owner. Sold our last place in 20 days, current one has been sitting on the market for a year with a realtor. I would have gone the flat fee listing/buy owner on this one but the soon to be ex didn't want to.

Research is not hard at all. Check recent sales, visit a few open houses to see whats out there and price it right.

Prices dropped about 10% since we bought so it's not a market in which the bottom fell out, just a correction but NOTHING comparable to mine is selling (starter 2 br condo 20 miles from downtown and 2 blocks from the train to downtown)

We had one offer 10% under asking price which equates to 20% lower than when it was bought 2 years ago.

Pretty soon the bank will have it. I'm done paying the mortgage myself (30% of my take home pay)on top of child support (20% my check)while my stbx wife and son live rent free in a family building.

end rant...

My advice... Put your home on the market and wait until you have a offer before making a move on buying another home... Go with an aggressive realtor that has good connections. do some research on the local economy and real estate market. That will help you form realistic expectations.

My wife and I bought our house 10 years ago. We made numerous improvements to it. A couple months ago, a 80 year old house we always wanted came on the market and we decided to go for it. We looked at the risks and did it anyways.

So here's our current situation... 28 days til closing on our "new" home. Lots of interest but no offers on our old home (which has been on the market 45 days). In this market, homes are moving in about 90 days. Which means we will probably have two house payments for a month. Not too bad. We have a very aggressive realtor.


We stand to make a pretty decent profit on our home, but nothing like we could have made a couple years ago.

Of course, our house may not sell for months, which means we will be cashing in some CD's and using savings to cover the shortfall. Not a desirable situation....

We are already preparing our friends for a scaled back housewarming party. We're telling them that we will serve ramen noodles and water, the event is BYOB and there will be a $100 cover charge to help pay the mortgage.

If any of you want to attend... let me know. It will be sometime in late July.

Where in the DC metro has ANYTHING dropped by 50%? I don't believe that for one moment.

I live in Arlington (Fairlington) and NOTHING in this area has dropped by more than about 20%.

It's called research. Research allows one to capture these things called facts, analyse them, and make informed statements.

At the height of the market, condos in Leesburg were selling for $300K. Ours just sold for $150. That's a 50% drop.

Do I need to offer more proof?

The EXACT same condo? As in, same floor plan, same subdivision? Same year built? Same options?

Yes. I know prices have fallen...some large drops in some areas. But nowhere have I seen a 50% drop.

My GF watches prices religiously. She wants to buy and is waiting for prices to come down to an affordable level.

I am not sure about Houston, but we just built in October and our old house sold in three days with about a $35,000 profit (5 years) in Austin.

We had to lease it back from the buyers until our new house was finished. A great realtor is key, even if their percentage is a little higher.

YES, buy mine so I can get the hell out of town!

Since you've got some time I'd just clean it up, do some quick upgrades if warranted and throw it on the market yourself - just see what happens. You can get a realtor later if you think it's necessary.

We're thinking of moving to a different part of town and if we do decide to do it we'll probably take that approach. If it sells we can just rent a house for a few months until we find or build what we're looking for.