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Is it pretty common for buyers to be closing on their home the same day buying a new home? It seems like there should be a little lag time in case for funds to clear etc.
So far every offer I have received is contingent on selling their home & closing the same day on both transactions.
I guess I should move closing dates back to compensate in case any failures occur.
Here is what you really need to know. On October 3rd the new CFPB rules go into affect. The impact of the new rules can force the delay of closing by 3 days after forms are received that are updated and corrected.
The link below is a good tool to help you see what is going on. I would add some time to make sure everything goes well...
Yes it is very common. Funds in Georgia, must be wired into the closing attorney's escrow account whether or not it is an all cash deal or is being funded by financial institution. I try not to have closings first thing in the am so to give time for wires to clear if someone on the west coast is literally hitting the button to fund a closing on the east coast.
It's hard but it happens. But if buyers loan/funds are late, then the purchase of the new home also is late. Everyone has to be prepared to be flexible.
Selling and buying back to back is one of the most stressful ways to play real estate.
I just had this conversation with Heart Throb last night.
"IF we sell this place, it will be vacant when we do. Either we will buy and move, or rent and move, and then sell, or we will be in an apartment. I'm not living in a house for sale and put up with showings."
In Texas, it happens all the time. The buyer and seller close first thing in the morning to ensure enough time to fund the loan, and then the seller closes on their new home at the same time, if it's at the same title company, and then they just hold the funds for that closing until the first one funds. If they close at a different title company, the money is wired to the next title company for immediate release.
Texas only needs a funding number, not recording.
Oct 3 (actually, in November since the October closings will more than likely be applications from before Oct 3) might come with some snags, but the Texas contracts have already submitted changes for that where there is an automatic extension up to 10 days if the buyer can't close on time. Then there will be domino effects in place.
So it makes a lot of sense to push the closing back a few days or a week to ensure they are guaranteed a closing & not be the last domino to fall?
Around here, a couple of days would be considered reasonable. A week would be a bit much because the buyer would need someplace to live during that time. Asking someone to stay in a hotel for a night or two is one thing. Asking them to pay for a week so that you can have peace of mind would be a bit much.
Well, sadly you don't want to be part of any chain of domino's falling.
The issue is what happens to the parties of the transactions while all this is happening. Your buyer needs to close and wants to take possession on the 1st of the month. Closing is set for the end of the previous month. There is a delay of some type of 1 to 5 days for any reason. Where do they live, where do they put their stuff for 5 days? What if they are selling their home and need to be closed and out, as you do, at or before the close of escrow.
This is going to be a dance. Not a hard one but a well choreographed one. As FalconheadWest said, you can and should make provisions for these things in both of your contracts ahead of time. Automatic extensions, lease back of the selling property for a few weeks at a set given daily rate and other methods to protect everyone in the chain.
You almost need to think in the window of 5 theory. With you at the middle, what is your buyers needs and plan if closing is delayed and do they have a buyer of their home involved. If so, what is your buyers buyer needs and plan for a delayed closing. Now go the other way, what is your seller's needs and plan on a delayed closing? Are they buying from a seller that has needs and a plan if that closing is delayed? So here are 4 different transactions that need to have contingencies so the important one, yours, gets executed without a hitch. Think "Got Realtor".
Remember the deals that have the least amount of issues are cash sales & existing close out inventory new home sales (usually from new home sales that fall apart after/during construction). If you have one of these in that chain you would be in fairly good shape and low risk of significant delays.
Agree with George -- quite common in Georgia. And yes, the domino effect sometimes comes in to play, but that's not usually because they are scheduled the same day -- it's usually because the deal falls apart at the last minute for some reason.
The new mortgage disclosure laws that go into effect October 3rd are going to have a significant impact for the next 60-90 days on slowing down the process, until everyone has a grasp of how it works and how to work it smoothly. Our favorite lender here has flat-out told us that we should allow a minimum of 45 days for closing from Oct 3 to the end of the year, whereas previously, it's been relatively easy to do 21-30 day closings. Not any more, unless they are cash deals.
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