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Torn Between Two Closings by M. Anthony Carr

The process of buying and selling a house is much like the Domino Effect. Everything get's lined up perfectly and when it's time to get things going, you just flip a switch and watch all the pieces fall into place.

But as we all know, not everything falls into place perfectly. In most cases, a seller puts his house on the market, sells it and then goes into the market to buy a replacement home. This usually takes a couple of weeks, then an offer is made and settlements are arranged to coincide with one another. The first home settles, from which the seller now turned buyer has plenty of cash to settle on the new house. Settlement happens again, followed by moving vans that arrive at the old house one day and deliver all the stuff to the new house the next week.

Sometimes, these time lines are not so perfect. A buyer may sell a house and settlement stares him in the face before he has found a home of choice. Worse yet, he's sold his house, has everything packed and his own home of choice can't go to settlement because the folks he bought it from just were told that the house they bought won't settle because the house he bought won't settle because the people he bought it

The best scenario for all of the following examples is that the parties involved renegotiate settlement dates so that the Domino Effect goes off without a hitch. If not, here are some tips on what to do:

Scenario #1: You've sold a house and bought a house, but for some reason the settlements don't coincide.

If you've already settled on your old house, and you can't settle for a couple weeks (or months) then you need two things actually, three

1) a place to stay during the time period;
2) storage space for your belongings;
3) a really big aspirin. (You will find that #3 will be a common theme with all these problems.)

You're really only up against logistics here. Find a friend or family member who can put you up for a while or possibly look for temporary housing if you're moving into a completely new neighborhood. You might even consider asking around at some worship centers who may have some housing where they can let you stay for a few days while you await settlement.

Scenario #2: Second, let's say you've sold your house and bought a new one, but the buyers of your home can't settle until after you're scheduled to close on your new home. Your obvious problem is that you won't have the money to get into your new home without the closing.
This one is tough. First, see if you can postpone your second settlement. If that doesn't work, then talk with your loan officer about constructing a bridge loan to get you through the two transactions.

A bridge loan, otherwise known as a 'swing' loan, is secured by the borrower's present house. It's obvious use is to provide the borrower with enough funds to close on a new house before settling on his existing home. According to the Realty Bluebook the Bible of real estate A bridge loan is acceptable, if:

· "the purchaser has the ability to carry the payment on the new home, the payment on the other obligations, the payment on the current home and the payment on the bridge loan; and
· "the bridge loan is not cross-collateralized against the new property."
This last statement means, the bridge loan is not secured by the new house just the home trying to be sold.

Scenario #3: This is a bad scenario. No one can settle on time and you find yourself in a grid lock. Depending on the reasons behind the houses not going to settlement could depend on what happens next. Either the buyer and seller have a friendly, albeit frustrating, release of contract or they exchange harsh words followed by threats of law suits. This scenario is rare, but it happens occasionally.

Torn between two closings can be avoided by secure financing, careful planning and surrounding yourself with able professionals. Don't leave home without one.

LINDA REYNOLDS

"REAL ESTATE PRO"

Helping Dreams Come True

Call Linda Reynolds For a limited time offer, if you list and sell your home through me, I will pay for a home warranty for your buyer.

CONTACT LINDA REYNOLDS TODAY

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