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It's silly how people make things more complicated than they should be.
With a shorter supply of homes, a small percentage of sellers want to close sale and purchase concurrently.
Seller1 wants to buy Seller2's home, but Seller1 doesn't price his own home to sell and tries to tie up Seller2's home with a contingency subject to Seller1's closing.
Browsing through the MLS, I've seen so many of these fail.
Yet it seems people keep wanting to try it, probably because agents are not educating sellers on the pitfalls.
Agent Comment: "Seller has identified his next home."
So what? That other seller isn't going to wait around long for this seller. And when this falls through, the next buyer will have to wait again for this seller to identify his next home.
Why not just do a standard sale, and then find a cheap month-to-month rental, put some of your stuff in storage, and take your time to find your next home? instead of rushing to find a home of that rare seller who might be willing to cooperate with a concurrent closing.
One excuse I've personally heard is that seller doesn't want to move twice. Big deal?
It's so shortsighted. The home you really want probably isn't even on the market yet.
You lose some money on rentals, but you have a better opportunity of locating the home you really want, and at least you closed the sale of your previous home.
is there really any significant benefit to concurrent closing ?
I feel people are just scared they may never own a home again, i.e. if they don't find their next home, at least they still own their current one.
Lol...we did just that 3 years ago....extremely stressful. We put our house up for sale, and had a buyer in 3 days. So we had to find a new place quick. Renting an apartment or something for a month or 2 was an option, but I didn't really want to move twice. Fortunately, it all worked out. Closed on the sale of our house in the morning, then closed on the purchase of our condo 2 hours later.
I was paranoid our buyer would either back out at the last minute, or his financing would fall through. Thankfully, it all went through fine.
I've had friends who bought a new house, actually closed on it, before they sold their old one! And we aren't talking about a cash purchase either. They had to make 2 mortgage payments for awhile. That's insane.
It's silly how people make things more complicated than they should be.
With a shorter supply of homes (aka sellers market)
a small percentage of sellers want to close sale and purchase concurrently.
Is that accurate? I'd suspect that all sellers would prefer that ideal scenario...
and that those being adamant about pressing for it isn't so small a percentage.
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It's silly how... One excuse... It's so shortsighted.
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Originally Posted by Jbeechuk
They had to make 2 mortgage payments for awhile. That's insane.
You have far fewer 1st time buyers in play; folks who are already in a rental.
Most will have more onerous/stringent lease policies for M2M extension than would in the past...
which puts them into the same cash strapped position as move up buyers.
I've had friends who bought a new house, actually closed on it, before they sold their old one! And we aren't talking about a cash purchase either. They had to make 2 mortgage payments for awhile. That's insane.
Actually, if feasible for your friends, their approach makes all the sense in the world.
I definitely always advise that approach to anyone who can comfortably carry two payments for a month or two.
It is the least stressful approach, and particularly if they have kids, pets, extended family, busy schedule at home. Get out of the commodity for sale and create your new home. Then, market and sell the commodity without impact on personal day to day life.
Minimal repetitive prepping for a showing.
Immediate showing ability, catering to buyers who discover the home for sale and want to see it NOW.
No one pawing through your personal stuff, valuables, prescription meds.
Personal property not being abused, broken, stolen.
And, buying while owning is an immediate governor on maxing out a mortgage on one house. Keeps the buyer within their means.
Bear in mind, the first house payment on the new mortgage can be made weeks after closing. So you have a month grace on the cash flow.
"Back to back" closings are immensely stressful, because multiple people whom you cannot control can derail the whole thing. We see stories here all the time of people whose buyer walked away.
When you buy first, then sell, you have more direct control over the proceedings.
Of course, in a soft buyers' market, owning two can be a bit nerve-wracking. But, again, I say "...comfortably carry two payments..."
And, when priced to market, houses sell.
If I decided to move, my new house would be under contract and closed before I put this one on the market. For sure.
I've had friends who bought a new house, actually closed on it, before they sold their old one! And we aren't talking about a cash purchase either. They had to make 2 mortgage payments for awhile. That's insane.
When we moved from Ohio to Maryland almost five years ago, we closed on the house we were selling the day before we left and closed on the one we were buying the day we got here. However, we didn't buy the new one contingent on selling the old. I would NEVER want to do that. Too much stress worrying if our contingent offer would be accepted, not to mention that we're under the special circumstance of being military and having hard-set moving dates. And now we're moving back to Ohio, and we won't be selling our current house until probably months after we've closed on the new one and moved in. We can most definitely afford both mortgages, and it's so nice not to have to worry about juggling closings to fit with our moving schedule, especially given that we'll be in an entirely different state. I think it would even be difficult in different cities in the same state! I don't see anything crazy about it at all as long as the buyer/seller is being responsible about how much they can afford on the second mortgage while carrying the first. It also keeps you from overbuying and allows for more disposable income later. We'll be investing the difference once we sell the current house.
Lol...we did just that 3 years ago....extremely stressful. We put our house up for sale, and had a buyer in 3 days. So we had to find a new place quick. Renting an apartment or something for a month or 2 was an option, but I didn't really want to move twice. Fortunately, it all worked out. Closed on the sale of our house in the morning, then closed on the purchase of our condo 2 hours later.
I was paranoid our buyer would either back out at the last minute, or his financing would fall through. Thankfully, it all went through fine.
I've had friends who bought a new house, actually closed on it, before they sold their old one! And we aren't talking about a cash purchase either. They had to make 2 mortgage payments for awhile. That's insane.
I always do this. Let's me move comfortably and wisely instead of the big rush. I think each should do what works for them.
I have closed dozens of homes contingent on the sale of other homes, but I have my sellers turn down more than we accept. I personally tour the homes and request the listing agent of the first home to provide a written marketing plan and price up front. If I question the price, we require appraisals up front for a third party valuation. I typically want non-refundable earnest money even if the sale doesn't go through since my seller might have to put non-refundable money down on their next home.
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