Consequences of Buying and Selling a Home Under Forbearance

I want to talk about a topic that is really starting to come to the forefront in the seller world – it’s when a home seller is trying selling a home and buying another and the tools I have at my disposal to help you with this.

Right now, a lot of folks are taking advantage of the CARES Act with deferrals and forbearances. Unfortunately, there are some really big unintended consequences with those programs that no one is talking about. The biggest one is the fact that if you as a seller or if you're an agent and you're listing someone's home and they are in this program, when they go to sell their house, that will be fine. But when they turn around to buy another house, they're not going to get a home loan.

This is a really big issue that needs to be addressed before you as a homeowner or as a listing agent take a listing to make sure that the homeowner can actually buy a home after selling theirs. I have a Sellers Advantage Program, which is really great. We start working with the sellers before they put their homes on the market, get them preapproved, and make sure there's nothing to stop them once they sell to buying the next home. The last thing anyone wants to do is to be under contract and then find out they can't even sell their home because they won't be able to buy a new home after all. This is going to be the case until we get guidance from Fannie and Freddie on how they're going to handle these deferral payments. Right now there is no guidance and therefore we have no way to do a loan because we have no information on how to process this.

So until this gets fixed, if you are a seller or a person who is interested in selling and you are in deferral or forbearance, you need to sit tight until things kind of settle down and we get some more information. And if you're a listing agent looking at listing homes for folks that may be in deferral or forbearance, and they haven't mentioned this to you, this is something you need to know as well. You don't want to put your home seller in a predicament where they don't have a place to go.

If you have questions, let me know.