Page 10 - SellerGuide

Coordinating Your Purchase & Sale
Many homeowners interested in selling and then purchasing a new home are rightfully concerned about coordinating the two transactions. Most people aren’t usually able to qualify for financing on more than one home at a time, and much of the equity in their current home will be required for the down
payment on the next home. In addition, it isn’t always clear in the beginning when you can expect to sell your home, and how long it will take you to find a replacement home. This problem is even more challenging in the current environment where purchasing a home is very competitive and can take writing multiple offers before getting one accepted. Fortunately, for a seasoned real estate professional, these problems are dealt with routinely. For instance, the problem of requiring the equity that’s tied up in your current home for a down payment on a new home is easily dealt with by writing a contingent offer, that is, an offer that is only valid if and when you’re able to sell the first home. Another issue that is often dealt with is when the home you’re selling closes much sooner than the home you’re purchasing. In that case, there are several options, two of which allow you to remain in the house until you’re new house is ready. In addition to these common examples, also critical to the coordination of two transactions is sufficient communication amongst all parties, ensuring everyone remains on the same page.
Where Will You Go?
If you are in the fortunate position of selling your home faster than expected, you might find yourself needing a place to stay until the home you’re purchasing is ready for you. Two common ways to deal with this are known as Seller In Possession, and Rent Back.
Seller In Possession
When you need to stay in the house after the close of the sale but less than 30 days, it is known as Seller In Possession. There is a place in the Purchase Agreement to indicate this will be the case. Both buyer and seller negotiate on payment terms, if any, and the situation is resolved.
Rent Back
When you need to stay in the house longer than 30 days, this is known as a rent back. In this case, a formal lease agreement is required, as you are essentially a tenant renting the house back from the new owner. Terms are negotiated by buyer and seller, and the contract is drawn up by the agents.
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