Yes. An owner financing down payment can come from the sale of the house you own now. Plenty of people have the money for a down payment. It is just sitting in their walls. If a bank won't lend to you but you have equity, selling can give you the 20% you need to buy.
How much do you need from the sale?
Start with the house you want to buy, then work backward. Our program normally takes 20% down, figured on the negotiated price. Exceptions are reviewed one by one. Customary closing costs usually run 2% to 3%, depending on the state.
On a $300,000 home, 20% is $60,000. Closing costs of 2% to 3% add $6,000 to $9,000. So you would want $66,000 to $69,000 ready at closing.
Now look at your own house. Say it sells for $260,000 and you still owe $170,000. That leaves $90,000 before any selling costs. Take out the $69,000 and you have about $21,000 left for the move and a cushion.
Those numbers are an example. Yours will be different, so get a real payoff figure from your mortgage company before you plan around it. Past-due taxes, liens and any second loan come out of the sale too. A tax professional can tell you whether you will owe anything on the gain.
Should you list with an agent or take a cash offer?
Either one can fund your down payment. What matters is how much you keep and when you get it.
A listing can bring a higher price, and if your house shows well and you have time, it may be your best move. You will pay a commission, and you may be asked for repairs after the inspection. You also won't know your closing date until a buyer's loan comes through. That makes it hard to plan a purchase around it.
A cash sale usually means a lower price and a firm date. For someone buying with owner financing, that date can be worth a lot. If your house needs work, the gap between the two prices is often smaller than people expect.
Get both numbers before you decide. For the cash number, one person I know and trust in this business is Malachi Cooper, who goes by Mal. His company, MalBuysHouses Nationwide, buys houses as they are and covers the closing costs, with no agent commission. He can close in 30 days or less, or on a later date you choose, and he stays your contact the whole way. He also buys in several of the states where we work, including Florida and North Carolina.
If the agent's number leaves you with more after costs and you have the time, list it. Pick the one that gets you into the next house.
How do you time selling one house and buying another?
The hard part is the order. You need the sale money at the closing of the new home, and you need somewhere to live in between.
Here is the order that usually works best. Find out if you qualify first, before you sell anything. Then get your sale numbers, so you know what you can spend. Then pick your homes and set the dates.
Our closings typically take 30 to 45 days. A cash buyer who lets you choose your date can line up with that, so your sale closes shortly before your purchase. Build in a few days of room. Closings slip, and you don't want your down payment stuck in transit on the day you need it.
Keep the closing statement from your sale. It shows where the money came from, and you will want it when your down payment is verified.
How this works with Sold With Financing
We qualify you on your income and your down payment. There is no minimum credit score. You pick three homes priced at $250,000 or more, so there is a backup, and I negotiate the price. Your deposit goes to a third-party title company or attorney in escrow, and the deed is in your name at closing. See who qualifies, or look at owner financing homes in Florida to get a feel for what your sale could buy. Then fill out the short form below and tell me you have a house to sell. It changes how we plan the dates.