Buying and selling a home the same day a risky move
The problem is that the first part of the day — the sale of your home from which you will be using the proceeds to purchase your new home — is entirely guided by the purchaser of your old home and their mortgage financing
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Q: We recently purchased a new larger home for our expanding family and are in the process of selling our present home at the same time. We wanted to do it all in the same day, which our realtor says is fine, but when we called our lawyer, she attempted to discourage us because it might jeopardize the purchase. What does she mean by this?
A: Basically, you are requiring that two distinct transactions be completed on the same day. The problem with that is that the first part of the day — the sale of your home from which you will be using the proceeds to purchase your new home — is entirely guided by the purchaser of your old home and their mortgage financing. If your purchaser doesn’t get their funds from the bank until the afternoon, your lawyer may not have time to close the sale and then turn around and use those funds to buy your new home. To further complicate matters, you will have to move that day (which is a stressful event to begin with) and keys for your new home will not be released until the vendor’s lawyer has your money. I have had clients waiting for keys while hourly-paid movers are sitting waiting with a truck full of their belongings.
A much less stressful and smooth process is to purchase the new home a few days before the sale of your home using bridge financing from your bank, move into your new home and then close on your old home’s sale. The proceeds will be used to pay back the bridge financing and you will have landed in your new larger home with a few less grey hairs.