Most everyone who is looking to sell their property will then need a new place to call home. Some are fortunate enough to be able to carry two mortgages for a short time. Others will need the proceeds of the sale to purchase their new home. While possible to close on both the sale of your old home and purchase of your new home on the same day, most times it is not practical. You may find your current homes gets a lot of attention when it hits the market. Then you may have difficulty finding a new home to purchase. Or vice versa. Read on to find out some practical ideas on how to sell a house before you buy one.
Selling your home before buying a new one
There are advantages to selling your home before you buy a new one. First, you will know exactly how much money you will have to purchase your next home. This will help you avoid buying “too much” house. Additionally, it will make financing your new home easier without having the payments on your current home to consider. If it’s a buyer’s market, selling your current home may be more difficult, and hence that task that needs to be tackled first.
Post Closing Occupancy by Seller Agreement
This is exactly as is sounds. The seller, you, will occupy the home after the closing. This agreement is executed by an addendum or separate agreement to the sale and purchase contract. It specifies how long the seller will be allowed to occupy the home after closing. The agreement will name terms including rental amounts and who is responsible for maintenance tasks. It should also include language specifying what will happen should the seller stay in the home longer than the agreement allows. Keep in mind many buyers may not want to agree to this. They may need to move into the home at closing. Your realtor, attorney, or title company should be able to provide you with this form. Contact Us if you have questions. This can also be accomplished through a regular lease.
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Pre Closing Occupancy by Buyer Agreement
This agreement is the opposite of the previous. In this case, the buyer will occupy the home prior to the closing. Again the agreement should be very specific and clear. It should always include:
- Rent or other consideration being paid by occupant
- Length of time prior to closing occupant will be allowed to take possession
- Maintenance of property including lawn, pest control, pool (if applicable)
- Terms if buyer does not close on sale of property as agreed in purchase contract
The pre-closing agreement is one most people are reasonably weary of. It presents many risks for the seller, especially if the buyer is unable to successfully close on the purchase. This is one of the least preferred methods of how to sell a house before you buy one.
How to Sell a House Before You Buy One
It is generally agreed that it makes the most sense to complete the sale of your home prior to purchasing a new one. This leaves you in a stronger positions for several reasons. 1) You will know how much money you have to work with on the purchase of your new home 2) The opportunity to rent or stay in your sold home 3) You will have time to make a better decision when it comes to purchasing your next home. Of course each situation is different, and we invite you to contact us to discuss the specifics. We’ll gladly help you map out a plan to sell your house and then buy a new one.
John R Neal, Neal Properties Team at Keller Williams Palm Beaches