As you know, whether you call it the closing, the settlement or escrow, it all means the same thing – it’s the moment the property moves from the seller to the buyer. Very exciting.
But if you’re up for it, right now we’re going to talk about settlements on steroids – twice as complicated, twice as important, and twice as stressful, as a normal settlement.
And I’m talking about all those people, who sell one house, and buy another – all in one day.
That’s right – one day!
It takes nerves of steel to get that done, but it happens, every day, in markets all across America. I mean after all, most people who sell a house buy another one. So it’s easy to see how sometimes those transaction can happen….on the very same business day.
First of all, this only really works if you’re selling one place and buying another – in the same general area. Really tough to make it happen if it’s a cross country move. But in the same city or town? Definitely possible.
Just think about it. You are selling your house, and you have a ratified contract on it. It is going to the closing table, say, on a Wednesday at 10AM. At that time, the buyer will purchase the house, and pay for it, with a combination of mortgage money, and the down payment. And all of that will pour into the closing company.
So by 11:00? Your house is sold, and all the profits are tucked away in the business account at the settlement company.
That house is now gone….and you haven’t bought the new one yet. Now for many people, the purchase of their next house will happen in a few days. So in the interim, they just have a mini-vacation, in a hotel. And that’s great.
But others have no interest in waiting. Or spending any money on a hotel.
They want to sell that first house at 10AM, then have lunch and buy their next one at 2PM – the same day. And if that’s you, here’s how to make it happen…without going gray overnight.
First, as early as possible, make sure you tell everyone involved that you want to do both transactions in one day. The settlement attorney. The lender. Your REALTOR®. And the moving company. Make sure they know that’s the plan.
Step two – schedule everything well in advance. And this is key: do both closings at the same settlement company. That way, when the money comes in from your sale – it can be immediately applied to your purchase, that same day.
If you use different closing companies, the profits from the sale will have to be wired to to the other firm….and that can take hours. So make sure both closings happen at the same settlement company.
Step three: be ultra organized. Make sure all the paperwork is in order. Make sure as a seller, you have done every single thing required of you…and have the receipts ready to show. The repairs. The termite certificate. And any remediation, like radon or asbestos. Also, make sure the utility bills, taxes, HOA dues or condo fees at the old place have been paid… You don’t want anything to slow down, or delay settlement.
Then when you become the buyer – same thing. Have all the money ready to go. Make sure you have an insurance policy in place on the new house. And that the utilities are turned on in your name, at your new address.
Step Four – the moving company.
Now is it possible to move out of one house in the morning, do both closings and then move into the next place that afternoon? Yes…if you don’t have too much stuff. Condos, co-ops, sure. But townhouses and single family homes? That could be tough. If you have a big house, and you have to move a ton of stuff, have the mover empty out your old house the day before you close. And keep all your furniture on the truck, overnight. Then, schedule them to arrive at your new place late in the afternoon, the next day.
Where will you stay on that one night? Well, if you want one last night in the old place – and many people do – get a sleeping bag, and make it a slumber party. But if that’s not your thing, you might be able to bunk with a neighbor, or a family member nearby, or….you might need to get that hotel room for just one night.
So, it is possible to sell one house in the morning, and buy another one in the afternoon. It takes organizational skills, careful scheduling, and a little bit of flexibility.
But just think. After you sell that one place in the morning – You might have hundreds of thousands of dollars – that you haven’t spent yet on that new place. So – before the afternoon transaction happens. Go to lunch. And Make it a really GOOD lunch!