Selling (Closing my existing home) before or after closing my new home
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Posted on: 25-10-16 11:35:37
Hi Everyone,
I am planning to sell my house next year and move into a brand new house. The closing is in Dec 2017 ( Yes it is quite far off), however since my existing house is my first house and I am going to be selling a house for a first time, I am not sure on how to execute the buy and sell transaction and how to time it properly. I spoke to my realtor as well. However this place has lot of experts and your opinion matters. Since my new house closes only in Dec 2017 and if I want my existing house to be sold on the same date or few days before then I would have to probably list my property around September with a 90 day closing.
Should my existing house have a closing date before or after my new house closing, if the closing is before then I would require storage of my stuff etc and live in a hotel temporarily. If my existing home closing is after my new home closing , I would require bridge mortgage and I would be pushing my home sale into off season, close to christmas etc.
So what is the right strategy here? Should I list it in late summer around july when the market is hot and have closing of my existing house around October end and live temporarily for a month or so?
And my new home builder is mattamy, do they close on time?
Please suggest me some ideas so that I am well prepared.
Thank you !!!
Congratulation Vivek. If market stays same for next year than I would suggest you to sell the house after you get FIRM DATE for closing from builder. Please note that there is a difference between closing date and FIRM closing date. I have seen builders delaying the house upto a year due to trade strikes etc which is beyond any ones control.
Mortgage should not be an issue as long as you show intention and proof that you will be selling your existing home. Mortgage during this transition time is called bridge mortgage.
Hope your transition is smooth.
Good luck
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Quote:
Originally posted by vivek901
Hi Everyone,
I am planning to sell my house next year and move into a brand new house. The closing is in Dec 2017 ( Yes it is quite far off), however since my existing house is my first house and I am going to be selling a house for a first time, I am not sure on how to execute the buy and sell transaction and how to time it properly. I spoke to my realtor as well. However this place has lot of experts and your opinion matters. Since my new house closes only in Dec 2017 and if I want my existing house to be sold on the same date or few days before then I would have to probably list my property around September with a 90 day closing.
Should my existing house have a closing date before or after my new house closing, if the closing is before then I would require storage of my stuff etc and live in a hotel temporarily. If my existing home closing is after my new home closing , I would require bridge mortgage and I would be pushing my home sale into off season, close to christmas etc.
So what is the right strategy here? Should I list it in late summer around july when the market is hot and have closing of my existing house around October end and live temporarily for a month or so?
And my new home builder is mattamy, do they close on time?
Please suggest me some ideas so that I am well prepared.
Thank you !!!
Hi Vivek,
There are 3 total approaches.
1. List and sell to match both closing dates
- this would be the preferred method since it avoids all other issues
-this should work out fine as long as the home is in good condition (consider staging), listed at fair market price, and the current listing deficient market holds up
2. Sell current home before new home closing date
- this would require storage of your belongings and a place to stay for your family
- storage sites are inexpensive however short term residential rental can be expensive, unless there is family or friend that you can move in with
3. Sell current home before new home closing date
- this should be a concern since the banks would provide with bridge financing
- I have had a client who "bridge-financed" for 60 days while I have done it myself for 20 days
- your financial institution may require proof that your existing home is on market or sold with a firm closing date.
Your realtor should be able to provide you further details. If you have any specific questions, certainly send a message and I'll get back to you.
As for Mattamy, they are pretty good however sometimes delays are not in their control. My family and I have owned 3 mattamy homes with 1 on time and the other 2 delayed by 30 and 90 days. Either way, they will notify you well in advance of any delays. Here's some info directly from Tarion website (http://www.tarion.com/homeowners/makingthepurchase/Pages/Delayed-Closing-Warranty-for-Freehold-Homes.aspx):
"1. Major Delay (of more than 15 days)
Your builder must notify you in writing at least 65 days prior to the original closing date in your purchase agreement in order to delay your closing up to a maximum of 120 days. As part of this notification, the builder must also set a new closing date which will be referred to as the “extended” closing date.
2. Minor Delay (of 15 days or less)
Your builder must notify in writing at least 35 days prior to the original or extended closing date in your purchase agreement in order to delay your closing up to 15 days. The builder must also set a new closing date at that time. However, if there has already been a major delay, the combined delay cannot exceed 120 days.
Please note there is no compensation for delays caused by events beyond the builder's control, such as strikes or floods, or delays which you cause."
