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I'm sure this topic has been discussed on here, although I can't seem to find it. If someone could point me in the right direction, that would be great.
I may be getting close to selling my home and purchasing another. How do I legally protect myself so that, if my sale falls through, I don't end up owning two homes? I've been given advice not to sign a contract to purchase the next home until we have a signed sales contract on our current home. We are not in a situation where we can close on the sale of our home and then go out and find another. We also do not want to rent. Therefore, we have to do the two transactions somewhat simultaneously with closing dates on both properties as close as possible to one another.
Beyond that, I'm not sure what other protections we can include in the contracts. In the sales contract, I assume the buyers are going to want a mortgage contingency. Since we plan to buy our next home without a mortgage, we will have no such contingency. So, as I see it, if our buyers can't get a mortgage, we will have to return their deposit, but could lose our deposit if we can't go forward on the home we want to purchase.
Any thoughts on this kind of situation would be much appreciated. I'd like to have as many protections as possible without making the contracts unreasonable to the other parties. I know our lawyer will weigh in on this as well. Thanks.
You can put a contingency in your purchase offer that your current home must sell first in order to complete the new purchase. If you are working with an agent, they will likely have a standard form for this contingency. This of course, will put you in a weaker position with the seller as they would prefer an offer without such a contingency. Having at least an accepted offer on your home will put you in a bit stronger position.
You can put a contingency in your purchase offer that your current home must sell first in order to complete the new purchase. If you are working with an agent, they will likely have a standard form for this contingency. This of course, will put you in a weaker position with the seller as they would prefer an offer without such a contingency. Having at least an accepted offer on your home will put you in a bit stronger position.
Thanks. I can't speak to the rest of the country, but where I live, it would be next to impossible to put such a clause in a contract. As a seller, I know I wouldn't accept a buyer who wanted such a contingency.
I may be getting close to selling my home and purchasing another.
How do I legally protect myself...
1) expand your horizon on nature and type of risk
2) secure competent 3rd party review of documents (contracts in particular) before signing.
2a) have that party (and familiarity) available to assist if/when needed as things progress.
Quote:
I know our lawyer will weigh in on this as well.
I'll suggest that you don't really trust your attorney... do something about that.
Thanks. I can't speak to the rest of the country, but where I live, it would be next to impossible to put such a clause in a contract. As a seller, I know I wouldn't accept a buyer who wanted such a contingency.
No way would the sale of my house be contingent on the sale of the buyer's home. I think you'd have to be out of your mind to do that in today's uncertain market, where homes languish for months without a buyer. I might have done that in the '80s, when I had two agents sitting at my dining room table fighting over my home and bidding up the price above asking. Not today.
Thanks. I can't speak to the rest of the country, but where I live, it would be next to impossible to put such a clause in a contract. As a seller, I know I wouldn't accept a buyer who wanted such a contingency.
Of course seller's don't really want it, but if they are hard pressed to find non-contingent buyers, then it's an option to consider. There are usually restrictions to help protect the seller, such as time limits for the buyer's home to close, and the ability to cancel and take another non-contingent backup offer. The buyer is first given the option to drop the contingency and if not able, then contract canceled in favor of new buyer.
Once your home sells, you can do a "contingency to close" which is different from a "contingency to sell".
The listing agent of the house you are buying will want to see your contract on your existing home but that is customary in my area.
True. I'm going through this now with a condominium. I have a buyer for my current place and I've signed a purchase agreement on another with it being contingent that I close on my current home. However, in my situation, both homes are in the same HOA (neighbors, so to speak).
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