Real Estate Article: In Between Selling Your Old Home and Buying a New Home
10/15/2002

If you would like to sell your current house right now and then use that money to buy a new home, you will have to know how to catch the perfect timing to avoid possible conflict between the buyer who buys your old house and the seller of your new house.
 
The best possible scenario is that we all have enough money to down the new house before we sell the current one.  However, in our not-so-perfect world, a.k.a., reality, more than 60% of home owners will need to sell their old house in order to have enough money to buy the next one. 
 
I will start with an example.  A while back, I was helping a client to buy a house.  The deal was set and we opened escrow and expect the escrow to close in thirty days.  At this time my client put his old house on the market.  This client has enough money for the down pay for new house, so he was not in a hurry to sell his old one.  However, he was very lucky that three days after the listing, a buyer made an offer and couple days later this old house also goes into escrow of thirty days.

At this point, the transactions seemed very successful, with the new house closing escrow on Sep. 1st, and the old house on Sep. 5th.  He was extremely excited, planning on putting in new tiles and carpet, and trying to decide the color of the new paint.   The four days between the closing of the new and old house gave him just enough time to fix up his new house.
 
However, the just days before the dead lines, we were informed that the release of the loan amount will take three extra days.  This means that the original closing date of the new house, Sep. 1st will now become Sep 4th.   To make the matter worse, in the contract, the seller reserved two days to move out of the house after closing the escort, which means that my client can’t move in till Sep. 6th.   Now, my client’s listing agent, who was in charge of selling his old house, for some reason did not reserve the same right to buy some time after closing the escort as the other seller did.  Therefore, the problem this client now has is more than just didn’t have time to fix up the new house--he and family are homeless for one day.
 
Finally, I helped him do a special recording on the transfer of title of the new house (a procedure that the home owner pays extra money to the recording office at the county to make the recording of the change of ownership on a property become effective on the same day.)  Eventually we were able to close the escort one day early, on Sep 3rd and then moved in the new house and gave away the key of the old house all on Sep 5th.
 
As you can see, there are many difficulties to smooth out the selling and the buying, and timing is everything.  The following are some helpful suggestions that I gathered throughout the years in real estate business.
 

1. It’s better to give have the same agent to do your listing and your buying.  Transfer from one house to another is a very complicated procedure.  It will be a lot easier on everyone if the same agent takes care of both for you.  It’s also important that you ask around before you choose your agent—rookies may not catch the perfect timing and some agents only specialize in one area.  
2. When you sell, initiate the plan fast.

Once you decided to buy a new house, put your old house on the market right away.  Lately, the average time of selling a house has prolonged.  Put your house on the market first, other wise there is no point of looking for a new house if you can’t sell your old one.

1. Buying the new house should be coordinated with the selling part.

Some seller might think that before they sell their old house they shouldn’t be looking for a new house. This is incorrect.  You need to be doing both at the same time.  There is no way that you can find a new house if you don’t start looking.  A good agent will help you to try to iron out the difficulties and technical adjustments.

1. Try to avoid dealing with buyer or seller on both ends who may need to buy and sell, too.  It’s problematic enough that one end of the circuit, you, is trying sell a house and buy a house at the same time.  Now can you imagine that other end of the buyer and seller are trying to do the same thing—it’s only going to make thing a lot more chaotic than it already is.
2. Synchronize the closing dates on the new and old house if possible.

Note that you can have your listing agent reserve at least a couple days after closing the escrow to move out of your old house.  Another way to ensure that both deals go through smoothly is to state in the selling contract that the closing date will be the closing date of the house that you are buying.
 
These steps will improve your chances of a beautiful, smooth real estate transaction.  Always reserve some time before you have to move out of your old house.  This way, even if you have a little hip-cup here and there, you will still have time to fix the problems.  If all goes well, you may give the keys to the buyer early which will make everyone happier too.
 
If you need further assistance, please call: 626-712-9088 Grace Hsiung.

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