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Should you focus on selling your current home before looking for a new one?

DEAR MR. MYERS: We want to buy a larger house, and found one that we really like. Problem is, we have not put our current home up for sale and would not have the money to close the new purchase until we sell it. Can we make an offer on the new house, contingent upon selling our current home first?

ANSWER: You can, but it’s doubtful that your offer would be accepted.

I understand your problem. Like many homeowners, you can’t afford to buy a nicer or larger house until you get the proceeds from the sale of your current property. Even if the purchase is completed, you don’t want to get stuck paying for two mortgages – the one that’s for your new home, and the other that is owed on your current property.

From the sellers’ standpoint, though, your proposed contingency would likely be a big turnoff. They probably have a timetable of their own and wouldn’t want to risk messing it up if your own house takes longer than expected to sell. And with sales in most parts of the nation still strong, they shouldn’t have any trouble finding a different buyer who wouldn’t make such an unusual request.

Though 74 percent of all sales that closed in January involved at least one type of contingency, according to a new survey by the National Association of Realtors, only 5 percent of offers included a provision that the buyer would get to sell his or her own home first.

The most common contingencies allowed the buyer to get a satisfactory home inspection (58 percent), required an appraisal high enough to justify the sale price (44 percent), and would allow the buyer to cancel the deal and get the good-faith deposit back if suitable financing couldn’t be arranged (43 percent).

Your best move now would be to get your house in tip-top shape as soon as possible and then put it up for sale. For-sale homes were on the market for an average of a scant 42 days in January, the National Association of Realtors says, so keep that in mind if you decide to make an offer.

REAL ESTATE TRIVIA: Though property prices have climbed to record highs in many parts of the nation, the National Association of Realtors reports that 22 percent of buyers in January paid all cash for their new home.

DEAR MR. MYERS: You recently wrote that a bankruptcy can stay on a consumer’s credit record for up to 10 years. But how long does “good” information about past payments stay on file?

ANSWER: Positive information, such as prompt payments on active credit card accounts or an automobile loan, remains on a report indefinitely and continues to gradually increase a consumer’s credit score.

Fair or not, info about accounts that officially were closed in “good standing” generally stay for only 10 years – just as most bankruptcies would.

DEAR MR. MYERS: We own a house and also own a second home in another state. If we create the type of simple living trust that you recently wrote about, should we put both our properties into the trust, or include only our primary residence?

ANSWER: It would probably be best to put both homes into the trust.

Many homeowners have bought or inherited a house, land or other property in a different state. When they die, their estate usually must go through separate probate proceedings – one for each state in which the properties are located.

If you instead create a simple and inexpensive trust to hold title to both properties, your heirs will save money and get the homes faster, because trusts (unlike wills) are exempt from the long and costly probate process. Talk to an estate planner and other experts for details.

David W. Myers’ column is distributed by Cowles Syndicate Inc.

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