Selling AND buying a home ?

hey guys!
I have a question- i am in the process of selling my house and buying a new one. I wanted to know if any of you have been in this situation and if so, what did you do in the time between the selling closing and the buying closing as far as living arrangements?

We need to use the money from our house for the down payment, so I wanted to know what are our options for places to live. I heard (from the mortgage guy and our buyers agent) that in the contract you can have something that theres flexibility and you can pay the buyer rent to live in your home till the new one is ready but the real estate selling our place is saying no and I am confused.

The fact that im pregnant and having visions of living in a hotel with my newborn is not helping!

Any experiences would really help. thanks!

Re: Selling AND buying a home ?

Can you get a bridge loan to close on the new home first?

We borrowed money and paid it back as soon as we closed on the home we sold.

Re: Selling AND buying a home ?

For any day that you stay in your current home after closing you can pay the new owners rent. This has to be outlined in your contract. I know this because the people we just purchased from had to pay us rent because they were in the house after closing. To be honest you (as the seller) have more control over when possession is given ver to the buyer than they have. We were really stuck...had to live with my inlaws because the sellers decided they couldnt get out when they had said they could! Just be upfront with the people purchasing your house and stay in constant communication with your attorney!

Re: Selling AND buying a home ?

thank u both so much! I am going to talk to my attorney tomorrow and mention both things.

Yea, I feel like our selling agent is pushing us to sign the contract and im not comfortable signing until something is in writing about how that is going to play out.

Thanks again, I appreciate it!

Re: Selling AND buying a home ?

I would NOT do a bridge loan.

I would have it written in your contract that the home you're purchasing is contingent on the sale of your home.

Re: Selling AND buying a home ?

ME personally, I would NEVER do a bridge loan bc you never know.! I have seen people get into serious financial trouble with a bridge loan.

If know the contracts can be writted to state you would pay rent to the NEW owners for each day like the other posters mentioned.

Re: Selling AND buying a home ?

You should talk to your attorney, but it sounds like you are talking about staying in your old home for a long period of time after you sell it. If you need to close on your first house before you can go to contract on a new house (because of the down payment), then you are probably talking about AT LEAST 30-60 days (and that assumes that you have the new house identified and everyone's ready to sign the contact immediately and there is no hitch in getting your financing and that the sellers of the new house you are buying can move to closing quickly.

Even if the buyers of your current home would agree to let you rent it for that long (and I don't think many buyers would want that -- most want to take possession when they take title), I think it may be cost prohibitive for you.

Every real estate contract is pretty boilerplate, and there is usually a standard provision that says that the seller of the home can keep possession for up to 5 days after closing, BUT they put money in escrow (usually several thousand dollars) AND pay the new owner rent. The contracts I've seen and worked on usually provide for rent of like $200 a day with $4000K in escrow (which makes sense,because what if the old owners damage the property while occupying it?).

Of course, the parties can agree to anything, and there can be a provision where you pay rent for an extended period. But I think if a buyer agreed to that, which is unlikely, they are going to expect you to pay quite a bit and put $ in escrow to stay on. Most people I know in that situation have had to just put their stuff in storage temporarily and stayed with friends or family until they closed on their new place. Not ideal, I know.

A lot of times, your attorney can try to line up the closings so that they are back to back, or even the same day (although it's easier if you aren't getting a mortgage, obviously). We just had a customer sell her house, and downsize to a condo, and the closings were the same day (but she wasn't getting a mortgage).

Also, keep in mind that most people don't put their entire down payment down at contract (a good attorney wouldn't let you). So if you are putting 20% down and getting a mortgage for 80%, you might put 5% or 10% down at contract and pay the rest upon closing. So can you swing a portion of the down payment without having closed on your current house, and then try to schedule the closings (first your current house and then your new house) so there is not a big gap in between?

Re: Selling AND buying a home ?

We are in the same situation and I really am not sure how this is going to go down. IF my house sells, I'm going to try to bump out the closing date as long as possible. But, you kind of have to tread lightly because you don't want the sale to fall through, particularly in this market.

I'm an attorney and I have done some real estate work. I really, really frown upon the idea of the seller staying in the house after closing. I feel that the liability is too great for the buyer. The only time I allowed that to happen was when the seller agreed to buy a separate insurance policy to cover themselves during that time.

When I represent a seller, I try to bump out the date as far as I can in the mortgage approval period. I don't think it's cost effective for the seller to remain in possession so I really encourage them to try to get out.

Re: Selling AND buying a home ?

Honestly (and it's not what you are going to want to hear)... but the best way IMO to approach this is be ready to move into a rental.

The most difficult thing to do will be selling your home. Don't even consider buying a home and going into contract without having your house sold. Many people are scared to move into a rental. It's not that big of a deal.

If you are open to the idea of a rental, you can focus on getting your house sold. Then once its sold and you are renting, your offers to buy houses will be stronger because you don't have any property to unload. You have all the flexibility in the world.

Re: Selling AND buying a home ?

Re: Selling AND buying a home ?

Sometimes you can get lucky and close on both houses simultaneously without a rental. I had nightmares about having to rent and move twice with 4 cats and 2 kids and 2 offices. We got really lucky as some others on here have and we closed on the old house in the morning and the new house in the afternoon.

If that isn't the case can you stay with family? I would do a rental before a hotel, but it really depends on how long you think you will need temp housing. I don't blame you for feeling as you do, to move twice with a NB would be a PITA. Honestly, we had lots of trouble getting our offers accepted when the sellers and their agents especially heard our purchase was contingent on the sale of our house. We didn't say anything about our old house (we got smart) the last offer we made. We did have a buyer so it really didn't matter. Don't disclose too much info and make sure your realtor is on your side about that. The only thing about paying your buyer rent, is that if your buyer is anything like the woman that bought my house that can be a bigger hassle. My buyer was renting her own house and kept harrassing me to make sure we were moving ASAP, kept asking us to take money off our sale b/c she was paying rent and she felt it wasn't fair that she had to wait for us when she was ready to go. I mean, she had no leg to stand on, but it was just annoying. JMO. I hope it all works out.

Re: Selling AND buying a home ?

Re: Selling AND buying a home ?

Re: Selling AND buying a home ?

Just wanted to add that while some people are advising not to disclose too much (about the fact you need to sell your current home) when making an offer on a new home, that's not really going to fly if you have competent agents involved. Plus, the truth will ultimately come out when attorneys get involved and start negotiating "on or about" closing dates, among other things.

When I have a listing and someone makes an offer, I always find out about the potential buyers' situation. Do they have anything to sell? Are they prepared to move quickly to closing? I owe it to my client to do that. But I think it serves everyone's interest to be upfront -- what's the point of getting an offer accepted and starting down the road of home inspections, etc. if everyone is not in agreement on all terms of the deal (including the timeline) and it will fall apart? It's just a waste of everyone's time.

But also, to the OP, you may be able to find a buyer for your home that is ok with your situation. When I bought my home on LI, we made an offer in June, but didn't want to close until November, because I was living in the city and working in the city, and we didn't plan to move until after I had my baby in December. It worked out great for our sellers -- they were going to move to N. Carolina, so closing in late fall gave them time to find a place down there. So we were all on the same page about delaying the closing awhile.