How risky is this - closing on new house before closing on current house

[pantherlj]

we are set to close on our house on Sept 27. I can choose to close on my new home on Sept 20 and move in prior to closing this house. Or, I can wait until my house is officially sold on the 27th and close on the 29th. Of course, I would prefer the 20th to avoid having to store my furniture for a weekend. My buyers agent said things will most likely be fine but there is also a chance something could happen at the last minute.

Any real life experience?

 

[Darcy03231]

I used to work in a law office that did residential real estate closings. While rare, your realtor is right, something can happen at the last minute and we did have a few closing fall through the day of closing. In the 13 years I worked there I would say it happened 4-5 times, but it did happen.

One of the most common reasons was that the buyers lost their funding from the bank because of a change in their financial circumstances, i.e., laid off from a job or hurt on a job and now collecting workers' comp.

Another one didn't close because it flooded and was uninhabitable.

We also had one where the sellers decided that they didn't want to sell after all. They just never showed up at closing - just sent their realtor with the deposit money back.

Personally, unless you can carry two mortgages I wouldn't close on the new house until the old one has sold.

 

[plummer925]

I would NOT do it - too risky. Storing your furniture would cost you only about $50, plus if you had to rent a hotel a couple hundred. If it falls through you WILL be stuck with TWO mortgage payments! Yikes!

The ONLY way I'd do it is if you own the house outright and are paying cash for the other home. I do own my home outright and I would still not close one one without selling the current. WAY too risky!!

 

[BridgetBordeaux]

Even though the odds are low for a mess up..............Do Not Do It.

The consequences of the worst case scenario are far greater than the inconvenience/expense of storing some belongings.

Here are 2 of our stories.......

The first story is actually not a big deal. We had a 40 day period that we were homeless! We closed on house number one and could not close on our new place until 40 days later. DD and I lived with friends in the old city and DH lived with a relative in the new city because he had to start his new job asap.

The second story..........a very close call.........we showed up to do the closing and the buyers told us they needed more time to close the deal. They did not have enough cash for closing. We asked if the buying agent and the buyers could negotiate some lower commisions and they said "no". Because of this, we had to reach in our pockets right on the spot to close the deal. We needed that big check in order to close on our new house just a few days later. If we did not have the extra cash available, it would have been a train wreck.

I know the odds are low of things going sour, but the consequences of such an incident are a big deal!

 

[seashoreCM]

If your current house were to not sell and close then what would you do?

If you would call off the purchase of the new house then you should not close on that too soon.

If you could and would go through with the purchse of the new house anyway then you should feel free to close a couple of weeks early.

Moving furniture to temporary storage is not just a $50. added cost. It is a full fledged extra move that costs hundreds or even thousands and you run into the problem of damaged items an extra time 'round.

 

[laughinplace199]

I wouldn't do it. The risk of something going wrong is small, but it's there.

Have you considered asking your buyers if you could rent back from them for a few days? That way you wouldn't have to store your furniture. We did this the last time we moved.

 

[plummer925]

If your current house failed to sell and close then what would you do?

If you would call off the purchase of the new house then you should not close on that too soon.

If you could and would go through with the purchse of the new house anyway then you should feel free to close a couple of weeks early.

Moving furniture to temporary storage is not just a $50. added cost. It costs hundreds or even thousands and you run into the problem of damaged items an extra time 'round.

I'm not at all understanding how temporary storage costs "hundreds or even thousands"?!?! If you are closing in a few weeks, rent a unit for a month and move it yourself...have friends help out. $50 for a HUGE unit around here. I'm not talking about getting a moving company to do it. Heck, even U-Haul pods are only a couple hundred!! Thousands? no.

 

[plummer925]

Have you considered asking your buyers if you could rent back from them for a few days? That way you wouldn't have to store your furniture. We did this the last time we moved.

^^^Fantastic idea!!

 

[BridgetBordeaux]

Yes.........that rent back idea sounds maaaahvelous

 

[Tistal]

Closing horror story here:

We were supposed to close on our home on April 12. On April 3, we got a notice from the seller's lawyer that there was a delay in the closing, and they had no ETA on when we could close.

We ended up not closing until May 31. Yes, you're reading that right, 49 days late. This was not something on our end (we ended up having to redo all the loan paperwork because it had been finalized for the 4/12 closing, but because we had to wait so long.....) as we were fully funded and ready to go.

So, just because all the ducks are in a row on your end, and the seller thinks they're all in a row on their end doesn't mean that they really are.

 

[jrw118]

Here is another horror story.
We are in our new house now for almost 3 years
We had listed our previous home for sale and we had an offer and contract in 30 days. We were thrilled. We were supposed to close by June 30 2010. Our buyer was so flakey. We ended up closing AUGUST 20 , 50 days late!!!! We were also in contract for our dream house and our sellers were PISSED to say the least. Our new home was vacant and they just wanted to get rid of it. When we finally closed on the sale the sellers attorney was on vacation and we couldn't close to August 30th. We had to rent our old home for 10 days. My buyer wasn't happy by it was his fault it took so long anyway. It all worked out but it was a nail bitter to say the least. I would never close on the purchase before the old home was officially closed. JMHO.

 

[4HppyCamprs]

I'm not at all understanding how temporary storage costs "hundreds or even thousands"?!?! If you are closing in a few weeks, rent a unit for a month and move it yourself...have friends help out. $50 for a HUGE unit around here. I'm not talking about getting a moving company to do it. Heck, even U-Haul pods are only a couple hundred!! Thousands? no.

We only had large furniture moved and it was 750.00.

A Storage unit is 50.00 around here but most people of a certain age and income use movers. It is not as cheap as 50.00 plus time lots of time. It

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[luvmy3]

I'll echo what the pp's said, I wouldn't do it. The risk of something happening may be low but its still there and the cost of that could be 2 mortgage payments for who knows how many months.

 

[zoemurr]

it depends on your financial situation and the market where you live.

We closed on our new house one week before the old one on purpose. That way we moved slowly, and had time to paint. We had no problems.

However we are very fortunate that if we had to pay for both for a few months we would have been fine. Also, the market was very hot and we weren't too worried about selling the old house again if we had to.

Good luck!

 

[plummer925]

We only had large furniture moved and it was 750.00.

A Storage unit is 50.00 around here but most people of a certain age and income use movers. It is not as cheap as 50.00 plus time lots of time. It

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I guess I understand what you're saying, but to me it's a waste of money to use a mover when you can get friends together and do it in an afternoon...and save that $750

 

[elgerber]

Agree with the others, if you can avoid it, don't do it. I work in mortgage, and we had a loan last week, to close Wed. On Tuesday the sale of his current home fell through, and now his house is back on the market, and his closing is delayed until then.

 

[lost*in*cyberspace]

I'm not at all understanding how temporary storage costs "hundreds or even thousands"?!?! If you are closing in a few weeks, rent a unit for a month and move it yourself...have friends help out. $50 for a HUGE unit around here. I'm not talking about getting a moving company to do it. Heck, even U-Haul pods are only a couple hundred!! Thousands? no.

A large enough storage unit to hold an average amount of household goods costs far more than $50.00! I don't know the size of the OP's family, but assuming they are an average sized two parent, two child family, do you have any idea how much stuff they must own and how much work is involved in a move that size? I do (military family; moved many times) and not only is all their stuff not going to fit in a large storage unit, packing, loading the truck, moving into a storage unit for a few days, then reloading the truck, then unpacking again is going to be a huge pain and expensive.

Even if you hire movers and they store your stuff for you, it's going to cost a lot more than $50.00.

OP, don't move until you close on both houses. Why not ask your buyers if you can rent your old house after closing for a few days until your new house closes? That's what most people do who can't move right away.

 

[LilyWDW]

I guess I understand what you're saying, but to me it's a waste of money to use a mover when you can get friends together and do it in an afternoon...and save that $750

Also depends on where you are moving to. I will be moving sometime soonish (fingers crossed) but I won't be able to count on anyone to help with the actual move. I will need to use a mover as there is no way to move 7.5 hours away, drive a car and a rental van, and do it all myself. Local moves? Yea, I could see just paying friends in beer and pizza (the best currency I have found), but non-local is a different situation.

Also, storage unit costs will depend on the area, availability, and length of contract.

 

[kiki02]

I would not do it unless I had zero mortgage and could well afford to wait out if need be. Especially in this MARKET! The banks are too iffy right now (and maybe buyers and sellers also).

 

[DizMe]

My horror story: I put my house up for sale. Escrow was going smoothly; buyers wanted me out at closing so they could move in, so I moved everything to storage and moved into a temporary apartment the day before escrow closed. I had a contingency clause on a new home being built in a subdivision. Day of closing, buyers changed their minds...and I was out of my house, in a different town (30 miles away), with a house on a contingency sale and old house now needing to be resold. It was a mess, but at least I could have cancelled the new house if I'd needed to. Fortunately, an acquaintance decided to buy my old house as an investment and I was able to salvage the situation. I lost about $5k on the sale but it could have been much worse. There is no way I could have managed payments on 2 houses.