Me and my wife live in Denver, CO. We pre-purchased a new construction home in October 2017, and it's scheduled to be completed by April 2018. Me and my wife have changed our minds on the home as it's a little far out of town, and the value has risen a considerable amount.
My question is, if we manage to sell the home in the first few weeks when we buy it, how easy is it to sell it from a documentation/legal standpoint?
Lawrence, are you purchasing with FHA or Conventional loan? Some FHA notes have it to where you must owner occupy properties for a certain amount of time before selling. (60 days)
@Jamaal Johnson It's a conventional loan.
@Laurence T. sounds like you have some money in the bank. That said, you might run into some static from your buyer's lender unless there are strong sales comparables to support your sale price. Find a mortgage broker and see if there are issues with the situation.
A better strategy I have heard from folks is that the builder might buy you out of the contract at something like half of the full amount (difference between your purchase price and the market) to avoid having a new never lived in home on the market at less then their asking price for the same model.
Also remember if you sell the new home after closing you have agent fees and closing costs which will eat away at your profits.
Talk to the builder like what @Bill S. said. Did it go up enough to cover the closing costs on the purchase side AND the sell side???
@Matt M. That's a good idea, I will see what they say. Yes, I did the math on closing costs, agent costs, and any taxes applicable.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.