How to Overcome the Issues of Simultaneously Selling and Buying a Home
Of late I have been lucky enough to have three customers who I have approved to purchase a home, however they are in need of selling their current homes before they can purchase their new homes. Not a problem, but a difficult situation nonetheless. Timing the sale of one home while preparing for the purchase of the next and planning the move as well can be taxing on the family. Managing two distinct negotiations and all of its facets can be overwhelming not to mention juggling all of the aspects of the closing so that we can close on the old home in the morning and then close on the new home in the afternoon; this is quite a magic trick. In the event that we cannot pull off a one day close which includes both homes, we need contingency plans to ensure that the family has a place to stay in the interim and that the furniture is in storage. In light of this situation I have decided to post a short treaties on this issue to help anyone who may experience this temporary situation.
First and foremost there is the Rent Back Option. During a Rent Back the former owners rent their old home from the new buyers (for a reasonable period of time) until the purchase on their new home comes to fruition. Then both parties can move into their respective homes. This can be a fail-safe, however the new home owners must agree to it.
In the event that the Rent Back option fails, well you can always fall back on Temporary Housing. This may include the dreaded short stay with family, a hotel, the couch by your best friend’s apartment or even a short term rental. This is probably the least favorite option of the three because if family or friends are not available a cost is incurred.
A last and least viable option is the Contingent Offer. This is usually a turnoff to the sellers because it introduces a purchase exception; the buyers will not purchase the home if they cannot sell their current home first. You can imagine the negative possibilities with this scenario.
From a buyers perspective it is always best to sell the old home first and then negotiate the purchase of the new home. In this manner the temporary housing issues will be resolved taking some of the pressure off of the buyers. This adds a measure of confidence to the buyers bolstering their position in the negotiations. It also removes the additional pressures of having to deal with both sides of the sale/purchase transaction simultaneously. The purchase process is stressful enough so let’s keep it as simple as possible. There is just too many moving parts to keep it together, something is bound to go wrong. Remember Murphy’s Law, what can go wrong will go wrong. However now you have an idea of what to expect. If you are looking for a Loan Officer who can assist you with this scenario, please give me a call, Brian Howell @ 832.676.9375.