Although not an ideal situation, it often occurs that a seller needs to close the sale of their house before completing their buying process.
I have closed two of these in the last few weeks and they can be tricky to navigate, but successful – if everyone is organized and prepared.
First, the easiest way to ensure both transactions close on the same day is to have both the sale and purchase at the same title company. This way, when the closing funds are received at the title company for the sale of the property, they can immediately be applied to the purchase of the new home.
This takes the stress out of then having to wire the funds to a different title company. Anytime you have to move money twice on the same day, there is a chance for an error to create a problem. Given that both transactions need to close on the same day, it is best to take any unnecessary steps out of the process.
Communication is key in this situation. Make sure both lenders know that you are closing simultaneous transactions on the same day. This way, they can be prepared and try and fund in the morning.
If each lender can fund in the morning, it gives you a better chance of success in case something goes awry.
Also, try to sign all the loan closing documents for both transactions at least the day before close of escrow. If everyone signs the day before, the lenders can review the loan documents and clear any last-minute issues the day before.
If the lender gets the green light to fund from their funding desks the night before, it will elevate any last-minute issues or problems.
Have a contingency plan.
Just in case things do not go as planned, make sure you have somewhere to sleep that night. If your house sells, but you were unable to close on the home you were purchasing, make sure you and your personal belongings have a place to go.
It is possible, though not advisable, to rent back for a few days or maybe even get pre-possession of the new home. You could just rent out the garage, if necessary.
Prepare the movers, so they are aware that your belongings need to be stored on the truck overnight.
Just make sure to have a plan.