With the real estate market bouncing back I have been handling some deals where clients try to sell and then buy a home in the same day. Theoretically that sounds like a great idea. The client thinks, “I will schedule everything to sell my home in the morning, take my proceeds and use them to help fund my new home purchase that afternoon. Then I only have to move my stuff once.” Unfortunately, these days, the kink in that equation is: will everyone’s loan be ready on time?
Unless you are dealing with all cash transactions, not only do you have to worry about your loan being ready on time for your purchase, but you also have to count on the buyers of your house having their loan ready on time as well. I am not saying this cannot be done; however, I have worked on many deals where the buyer’s loan package is delayed for one reason or another. This means if your buyer’s loan isn’t ready then you can’t buy your house, or if your loan isn’t ready and your buyer’s loan is, then you may (depending on what your contract states) have to move out of your house and not yet own your new home, thus having nowhere to live. I have had clients have to move out, put their belongings into storage and stay in a hotel until their loan was ready for their purchase. You do not want to be in that situation.