Thursday, January 14, 2016 / by Extreme Home Selling Team
There are many reasons to effect simultaneous transactions:
A) Reduce Double Mortgage Payments!
B) Transfer Equity for Tax Savings
C) Desire to purchase is greater than renting
and so on for each individual situation...
Creating a simultaneous transaction or buying within 30 days of closing on your original home allows you to utilize your existing home without storing household possessions, renting short term accommodations, uprooting the family and pets, added expense of the previous arrangements, and generally adding tremendous stress to your lives. In a most favorable situation, you would have enough income to carry two mortgages and living expenses as you move into your new home and wait for the sale of the old home. Dependent on the needs of the Buyers of your old home, you might ask for this kind of flexibility during negotiations. If they are in a rental situation, perhaps they can perform on a month-to-month basis until you close on your new home and then secure a final move date. This will most likely require a concession in another area on your part. Be prepared to offer!
If you are in a position to carry both mortgages, but need cash to close, consider taking out a HELOC on the current home if allowed. Now you are better armed to shop AND close. Make these arrangements well in advance of the sale as Lenders get sticky about paying it off in a short time (they like the interest accruing!). You can also talk to your bank about a Bridge Loan but this usually requires an unconditional Contract for Purchase on your home, all contingencies removed, ready to close.
What to do if there's not enough income or cash? You're couch-surfing at Mom's again! Just kidding!!
If you can't pull off the purchase of your next home without the equity in the old home, you have to sell before you buy. This is where the back-to-back transactions come in, HOWEVER, the Next Home Lender will want conclusive evidence that the Old Home is absolutely positively SOLD with the unconditional Contract for Purchase as outlined previously. Most Lenders will want to see a significant non-refundable deposit from the Buyer with your Home Sale closing prior to your Home Purchase. This way, you don't have to find temporary housing or furnishings storage, nor carry two mortgages.
The Extreme Home Selling Team specializes in Simultaneous, Back-To-Back Transactions!
Call us when you have that Specific Time-Sensitive Deal that MUST go through On Time!
ROBERT "CHIP" DEACON, Broker-Associate
Jeff Kaplan, Customer Care Team
Shari Shepard, Team Admin
Laura Dobrin, Realtor - Buyer's Agent
Adding a Little Sharisma to Your Life!