If you are ready to move out of your starter home and are ready to sell, you may run into some complications if you are trying to buy and sell at the same time. The timing may cause complications that you aren’t sure how to solve on your own. It can be challenging and cause a lot of anxiety in a time where you want to be excited. There are a few things you will want to know when you are considering buying and selling real estate.
What complications can arise when buying and selling at the same time?
Selling one home and buying another creates a set of complexities that goes beyond those of a regular real estate transaction because the sale and the purchase must take place concurrently, following a mirrored path that allows both to close on the same day.
To do this you’ll need to involve additional people. Your attorney (handling both the purchase and the sale) will have to coordinate with the attorneys of your old home’s buyer and your new home’s seller, as well as all the other individuals involved in both transactions.
If that is impossible – for example, you’re buying in one county and selling in another – you may have to consider obtaining early entry into the home you’re purchasing and completing that transaction on a separate day, or delaying your purchaser’s occupancy of the home you’re selling so that you can move out a day or two after closing.
Early entry and post-closing occupancy can be tricky because everyone involved must agree. You essentially enter into a short-term lease agreement to cover the days of post-closing occupancy during which you no longer own the home.
One issue that can arise in such a transaction is sale contingency. In this case, a person seeking to buy a home is relying on money from the sale of the home in which he or she currently resides to complete the purchase of the new one. This person’s attorney can execute a rider setting a specific number of days within which the buyer must enter a bona fide sale contract for his or her residence to keep the purchase contract alive.
A bona fide contract requires the buyer not only to enter a contract for sale of the home, but also to overcome the attorney approval and home inspection contingencies. If both of those items are accomplished within the requisite time, the sale and purchase will proceed – presumably with simultaneous closings. As the buyer, you will complete your sale first, and then immediately take the money from that sale to the closing of your purchase to complete that transaction.
A closing contingency is slightly different. If you are already under contract to sell your home but that payment is still pending, then the contract for your purchase will be contingent upon the closing of your sale.
Take one thing at a time and find someone who can help you avoid making mistakes while you are buying and selling real estate at the same time. If you want to know more, contact Richard Cole in Buffalo, New York.