Ideally, that’s what you’d like to achieve. You sell your old house firm. You find your new house and you enter into an Agreement of Purchase and Sale, closing the very same day. Perfect. Best possible scenario. Now you can organize your moving van and start packing. And you can get going on all the other tasks that are necessary to effect your smooth move.
Selling and buying the same day means you’ll save “bridge financing” costs: which you would need if your sale closed after your purchase. That temporary bridge loan to complete your purchase before you’ve got the net proceeds from your sale always adds extra expense you’d like to avoid.
Selling and buying the same day also means you’ll save temporary accommodation and furniture storage costs that you would incur if your sale closed before your purchase. If you do time your real estate transactions so that you sell first and buy later, you know you’ll incur some temporary accommodations costs. A hotel, an apartment. Maybe not, if you have some friends or relatives who will welcome you into their home for a few days. But unless they’ve got lots of room in their basement, your mover will still need to be alerted about storage of your furniture. And that will be a cost. Not optimal, but those costs of selling first and buying later will at least be predictable. You can budget for them, no surprises. Absolutely, though, you’d like to avoid them. Move once, get unpacked.
What happens if you do time your deals so you’re selling and buying the same day, and something goes wrong? That’s always a risk. For your own peace of mind, and to manage your own expectations, it’s best if you contemplate and plan for that possibility.
Most frequently, difficulty arises if your purchasers can’t close your sale deal to them on time. Especially during the busy summer months, when everybody wants to get settled before school starts, these sale and purchase transactions tend to happen in a tightly-linked bumper-to-bumper chain. If your purchasers were selling a house to buy yours, and they are delayed in getting their funds from their sale, they won’t have the money to close your sale to them. And if you don’t have your sale funds, then you’re not likely to be in a position to close your own purchase.
That’s the simplest scenario. Maybe it’s not even your purchaser on your sale who is putting on the brakes, but a few deals further up the road. Like one of those terrible chain-reaction car accidents involving multiple rear-ended vehicles on Highway 400 rolling across the median and into the ditch, with ambulance sirens and fire trucks and . . .
Or at least at the time it can feel that way. Your furniture is sitting on the moving van, waiting to be unloaded. You’re paying your movers by the hour while you wait to hear that you’re in funds. While you wait to close your sale deal. While you wait to get your keys for your purchase. For weeks you’ve been imagining that moment when you will open the door on your new house and walk in and begin to make it home. Maybe you’ve planned a special celebratory dinner and been cooling your champagne all day long. And now, so disappointing: it’s not happening. So nerve-wracking: the clock’s ticking. And if your sales funds come in late, your purchase can’t be registered on-line after 5 p.m. Registry shuts down.
Of course that decision to sell and buy on the same day has generally been made long before Anderson Adams has seen the Agreement of Purchase and Sale. And Anderson Adams doesn’t have any ability to hurry things up at the head of the chain: we know you understand that. But still, that’s when you want to be dealing with an experienced real estate lawyer, backed up by experienced real estate clerks. Who stay calm. Who empathize. Who are likely to have good working relationships with the local real estate lawyer and the clerks acting for the buyer of your old property and the seller of your new property. People who know what to try and are prepared to do everything they possibly can, because they do understand how worried and upset you feel.
Can Anderson Adams get evidence, even if it is too late to register, that your sale funds have been deposited so you can buy? Will there be an exchange of faxes and emails to provide sufficient assurance that makes it possible for you to move in to your new house, even late in the day?
Possibly. But sometimes it won’t happen. When making it happen is beyond our control.
So it’s always a good idea if you’re planning to sell and buy the same day – and to avoid the certain costs of bridge financing, or the certain costs of temporary accommodations and storage – to budget a little bit extra. Just in case. And to make sure your moving company knows you’re in a traffic jam. That you’ll be waiting to move in until your sale closes. So your movers won’t book the same van for another move for somebody else later in the day. So your movers won’t have to shuffle your furniture out of the moving van into storage at your cost, even overnight.
If the worst happens, and if you do plan to sell and buy the same day and there’s a chain reaction that does hold things up, how will you feel a year from now when you look back on your moving day? It may not have been the best experience of your life. Moving seldom is. But we hope it no longer feels like a disaster, or anything remotely close to that horrific Highway 400 scenario. We hope instead that you’ll remember: Anderson Adams was right beside you, doing everything possible to smooth your move.
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