Moving is a stressful process when you're just selling or buying a home. But what about when you have to sell AND buy a home, how does all of that work? I'm going to share some tips & info on the process, so that when you are ready to sell and buy a home, you know How to Close on TWO Homes in One Day!
Buying & Selling
If you own a home and plan to sell then buy another home, you're going to first have to coordinate the closing dates. But if you haven't found a home yet, or, you haven't sold your home yet, HOW do you even begin to start the process? You have a few things to consider before getting started:
1. Buy a Home First? It all depends on the market. If you're in a market where inventory is low (seller's market), and homes are selling fast, then it might be a good idea to buy your home first. That way, you don't sell too fast and have nowhere to go. This could lead you into a temporary housing situation IE - living w/ family, short term rental, or a hotel.
However, if you can find your perfect home, come in w/ a great offer, you might be able to set an extended closing date of 60 days. You don't want to go too far out and ask for 75-90 days, but 60 days should give you time to list your home with a realtor, get an aggressive marketing plan together and prep for a quick sale.
TIP - Your home to list should be almost ready to go once you start this whole process.
2. Sell Your Home First... On the flip side, if you're in a buyer's market where there are more homes for sale, and homes are selling at a slower pace, then you might want to sell your home first. This was the case back in 2009-2012, when we were still recovering from the recession and there were more homes on the market.
3. Home Sale & Close Contingencies - yes or no? Many buyers like to ask for an extra contingency in the contract. IE - a "home sale" or a "home close" contingency. In this scenario, the buyer writes a contract/offer on a home that is contingent on their current home selling or closing... This gives the buyer an "out" just in case they don't sell their home. I just had a successful home sale contingency on an Algonquin home, but then I also just had an unsuccessful home close on a Huntley home... These can go either way.
Pros & Cons to this... Cons - These can be complicated, and seller's typically don't like to deal with them as it's more risk to them, and deals can cancel... Pros - It can provide buyers the extra security in the process, so they'll know they have an "out" just in case they don't sell or close their home.
These should be dealt with on a true case by case scenario, and contact your real estate expert with questions on contingencies.
TIP - you can also sell your current home, close on it, then lease it back from the buyers. This might not work in every scenario, but it's an option. The lease is paid at the closing, and the security deposit is held in escrow by an attorney. This will give you the peace of mind in selling your current home, while having more time to search for a new home.
Financing - I Need the Equity in My Current Home
If you're planning to sell then buy, there's a good chance you'll need the equity from your current home to pay for the new home. Or, at least use it for a down payment... If your equity is tied up in your current home, then you'll definitely have to sell & close that one first. But how do you get the money out of that house in time to buy a new home on the same day? Do they write you a check at the closing, then you bring the check over to the new closing?
There's a few ways this can happen: 1. We always close real estate transactions with the help of title companies. The title company may wire the funds/proceeds from the first sale/closing to the second sale/closing. This is an easy and secure way to ensure the funds arrive in time for closing on your new home. Or 2. The title company might cut a check for the 2nd closing, which, would be made out to the title company that's closing the 2nd deal... Also a good option.
In Illinois, we close real estate transactions with the help of attorneys. They're here to help us with paperwork, escrow, title, and closing. Your realtor will help you set all of this up, to ensure a smooth closing for both homes!
TIP - make sure you know if there is any "overage" with your funds at closing. If there is, the title company will cut you a check at the closing. If you are short funds and need to bring more, you'll need to bring those funds via cashier's check or a wire. Your lender, realtor, & attorney will have you prepared ahead of time so you know your money situation.
Walk Throughs and Movers
This is a tricky one... The week of closing will be one of the craziest weeks of your life. You'll be moving out of your current home, storing your stuff, or it'll be on a truck for a few days before you close on your new home... Then you'll have to clean your home and get it ready for your new buyers... All of this is done on a time crunch, because closing day is coming soon!
Here are some tips & recommendations:
1. If you're closing on both homes on the same day, get moved out a day or two before and store your belongings w/ movers. This may cost a little more, but it'll give you time to clean (or hire cleaners) for your current home, and your buyers will be able to do their walk through 24 hours before closing.
2. Schedule your walk through for your new home an hour before the closing. This will give the sellers enough time to move out & clean. It'll also give you one more look at the home prior to closing. I like to do walk throughs as close to the closing time as possible...
3. How clean do the homes have to be? The sales contract calls for homes to be "broom clean" at the walk thru/closing... IE - sweep floors, vacuum, clean out cabinets, fridge, closets, and get rid of personal items. It doesn't need to be a "professional" clean, but you still want to leave your buyers happy at their walk through.
4. Transfer utilities to your new home, beginning that closing day.
5. Leave all keys, garage openers, appliances manuals, or any house pertinent information at the home. Usually in the kitchen on the counter.
TIP - leave a nice note to your buyers, with maybe a bottle of champagne or wine. Wish them well in their new home.
There is more detail I can get into about How to Close on TWO Homes in One Day, but, this will give you a general idea on how the process is done. If you have any questions - you can call me at 312 217-4398 or firstname.lastname@example.org Or visit www.103realtysells.com
Algonquin Top Realtor, Home Selling Expert