I recently closed four deals involving 2 sets of clients—each couple sold their existing home and bought a new one on the same day. You would think that is the norm in my business here on the Main Line, but there are often reasons why this does not happen. First-time homebuyers, relocating families, downsizers moving to assisted living communities and renters may just have one transaction. This aspect of my job requires a lot of upfront calculation and attention in order to make everything work smoothly. Done right, it is a little like a magic trick—you don’t see how it happens but if it fails, it is all too obvious!
Timing should be a topic at the very first meeting. Both of these couples expected to sell before buying and had a plan for where they could live short term until they could find and close on their next home. In one case, however, they had to sell in order to afford to buy. The other couple had the means to carry 2 mortgages for a while, giving them more flexibility. Still, no one wants to pay a double mortgage for too long and the fear is that the right home will not come on the market. Or worse, the now-empty old house just sits on the market. More about this couple later.
The first couple knew that they would have to put an offer on a new house that was contingent on the sale of their existing home. That is always the lender’s call and I had connected them with a knowledgeable broker right at the start who could advise them. Some buyers have income and savings that allow them to get a loan even if they have not sold their home (or in some cases, if they decide to keep it for an investment property). Since this young couple could not qualify for a mortgage without the proceeds of the sale, we had less leverage in making offers in a seller’s market where many buyers were looking for few homes. That makes my job trickier. A popular home will get multiple offers and any offer that is contingent on another home’s sale will not be as attractive to the sellers unless the offer price is higher than the other offers. I do not like my buyers to overpay! So I want to find a good home that has been overlooked because it has some perceived issues, is overpriced, or some other reason. Fortunately, they did a great job of preparing their home for the market and priced it perfectly so that it went under agreement fairly quickly and we found a relocation-company-owned home that had been overpriced. The company had just agreed with the owner to buy him out and they were ready to take a lower offer contingent on the sale of an existing home to get the house off their books. This was a very fortunate confluence of events.
Everyone involved with the sale and the purchase had to be consulted to set a closing date. Inspections had to be completed and repairs done. Both lenders needed enough time to get the appraisals in on each house and prepare the paperwork. The relocating seller had to clear out all of the staged furniture. The relocation company had to approve the title company and its findings. My sellers/buyers had to postpone a vacation that had been set months earlier. It seemed like a Monday after a holiday would be a good day so they would not have to take too many days off work to prepare and move. Then the title company said that a Monday after a holiday was a risky day to close because the lenders were often not quite ready and would not wire the loan proceeds in time in many cases. So Tuesday it was!
That having been decided, movers were called and that timing was tricky, too. They argued that they could not pack up the old home early enough for the closing to occur in the AM so the proceeds could get to the second closing in time for the PM closing. And then they would have to come unload in the new house after that closing, which would be overtime rates. They proposed packing up the day before and would charge for the overnight storage. We ended up having the moving truck packed the day before and the seller of the new house let the truck park in the driveway overnight. Good solution.
The last trick was the actual proceeds of the sale. The net amount had to make it to the second closing. In the past, a title company would accept a check brought by the sellers of the old home to their closing to buy their new home. That does not happen much anymore so a wire of the funds had to be arranged and enough time given for the money to make it through the banking system to the new closing. This took a lot of work because of all the fraud in wiring money that has occurred lately. Both banks wanted multiple forms of verification and double-checking that the request was a valid one.
We were all tired by the end of the day but could not have been happier!
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