I often work with buyer’s that have the financial resources to purchase their new primary residence prior to selling their previous home. But for most of us that is just not feasible so let’s start with a basic question, “one move or two”? Relocating your possessions from one home to the next is difficult at best. The thought of moving twice in a short period of time is often too much for some people to bare. Here are a few considerations when negotiating for a concurrent close of escrow in a multiple, one-move transactions:
* Include a strong “subject to” clause stating that should one escrow fail, both fail. This language should be included in the sale of your current home as well as purchase of the new one. As a buyer you will find yourself in a much stronger bargaining position if you have your trailing home in escrow during the initial negotiation with the seller.
* Will the seller(s) of your replacement home have the right to continue to offer their property for sale? If so, your contract should include the right to waive your home-sale contingency. This waiver would typically provide for an increase in your earnest money deposit so one would only waive this condition feeling very confident in your ability to perform.
* When will the time frames for performance begin? Inspections, financing and title/escrow work all require up-front financial commitments. This is mostly about timing and I like to recommend creating concurrent thresholds for performance as both transactions move forward.
* Include an agreement to occupy your trailing home after close of escrow. Basically, a rental agreement allowing you 3 – 7 days to get your belongings from one home to the next. It will also make things much smoother should all parties agree to run both escrows through the same title/escrow company.
Perhaps I’ve oversimplified this process a bit, but this does give you some points to consider.
The second option for moving up or down is to plan for temporary housing. Perhaps a short-term rental or maybe you have friends or family that you can “shack-up” with for a while. I’ve selected this option several times, for me it’s come down to Cost vs convenience. I’m not sure how much I’ve saved or earned by planning for a double-move but it is tangible. I imagine presenting two identical offers to a seller at the same moment. Identical except that one of them contains the contingency for the sale of another home, the other offer does not. Sounds like a pretty easy choice for the seller. But wait, the buyer with the house contingency is willing to pay more! The question is, how much more would that buyer need to pay to compete with or exceed the other? This is not a clearly definable number but to be sure, there will be a cost for the convenience.
Once again, start by consulting with a good real estate broker and lender to determine your best options. It’s not a bad idea to run this idea past your accountant as well. In the end, a thoughtful plan for this type of move is essential. For more discussion n this topic visit: https://www.relocatingtoreno.com/blog/signs-that-it-s-time-to-find-a-larger-or-smaller-home