The real estate market presents many challenges, and among them is the decision to buy and sell a home on the same day.
This scenario raises numerous questions for homeowners. Is it practical or even advisable to handle two significant transactions within such a short timeframe? Let’s delve into the intricacies of this decision to understand its implications.
A Risky Move
In short, the answer to this question is likely no.
While it’s possible to sell a home and buy a new one on the same day, simultaneous real estate transactions open the door to risk. One of the biggest issues your clients could run into is having one or both deals fall through or become delayed.
From time to time, a buyer and seller agree upon terms, but something comes up, for example:
- The buyer doesn’t obtain a mortgage on time
- The buyer doesn’t fund the loan for the sale part of the transaction timely
- The seller can’t get out of the house in the window required for the buyer to move in
- Unforeseen renovations leave buyers without a house to move into
It’s nice to have a buffer if your client is stuck relying on any of these factors to close their own sale or get into a new property.
Sellers buying a new house the same day could run into problems if the sale doesn’t go to plan.
Now a buyer purchased a new home, but their old home is still on the market. They’re responsible for both mortgages until the first house sells. This calls for additional financing, which is expensive with no real advantage to the homeowner.
Similarly, if the new home purchase doesn’t go to plan but your old house sells, your client is going to be challenged with where to move their belongings or bearing the cost for a post-closing possession agreement. For example, maybe they buy a house, and the current owners can’t get out in time for them to move in. They’ve already sold their current home and must be out before their new home is ready. What do they do?
In tricky real estate transactions like these, there’s no clear-cut answer. An experienced real estate lawyer helps track contracts, contract changes, post-closing possession agreements as well as the legalities on both sides.
Wait it Out
The reality of current real estate market trends suggests simultaneous home buying and selling is going to be a challenge because while selling is relatively easy, finding property to buy is more challenging. Since there is no guarantee that things will go according to plan (or hope) it is best to have a back up plan to avoid the challenges of selling and buying on the same day.
If possible, wait a day or two between selling and buying properties. Ensure both sales go as planned and you have somewhere to live.
Working with a lawyer keeps your clients in the know about options to assure smooth transitions. Don’t be caught unaware or fall victim to misinformation or inevitable challenges.