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

[ronandannette]

My response was based on the previous poster who mentioned the seller showing up at closing, disclosing a new leak, and handing her $300. The repair ended up costing her $2000. Stuff happens even after inspections. Houses have issues that can show up anytime. Stuff shows up at walk throughs. I guess in that persons situation at least the seller disclosed the issue. I have seen situations where a seller does not pick up all the trash out back, or cannot get a contractor in time to fix issues found in the inspection etc. Not everyone can or is willing to hold off on a closing to have these things done. Sellers can deal with it either by having money held in escerow until they deal with it or they can give the buyer money to deal with it. Depending on the issue and the buyers comfort etc.

I guess the main difference between the two systems is that yours seems to "change on-the-fly" a lot more than ours does. Another thing I find fascinating is all the references to buyers and sellers dealing with one another. Here the two parties would likely never even meet - the entire transaction is handled by the realtors and most realtors would be irked if the parties tried to "get into it" in that way.

 

[Ceila]

1. I don't put much weight
2. into the reality
3. of what some people post.
4. I think some
5. like to stand out
6. in the crowd.

Fixed that for you.

 

[Suz D]

What should have happened is that the lawyer held money in escerow until the repairs were made. Selller paying for the repairs in full.
Once repaird they get the rest of their money. Ive seen this done many times especially for issues found at the walk thru.

I really wish this would have been suggested. I had no idea this was possible. The lawyer wasn't there just his assistant. They gave us the check when nobody else was in the room anyway and we were clueless. The leak was discovered after they moved some stuff in the basement. I guess our fear was that they wouldn't agree to sell it and then where would we be? I doubt that would have happened though.

 

[Suz D]

Are professional home inspections not a common part of real estate transactions there? Almost all deals are written conditional to Home Inspection here and if issues are found the price of the repairs is agreed by the parties before that condition gets waived. These inspections are done at the sole expense of the buyer and are a standard clause in an MLS contract; if a buyer wishes to forgo an inspection they must sign a legally binding waiver indemnifying both the seller and the realtors. Our contracts also include standard "Duty to Disclose" any defects the seller and seller's realtor should reasonably have been aware of. Failure to do so (with or without a home inspection) can be subject to future legal recovery against the seller and sanctions by the Real Estate Board against the realtor.

They found it when they were moving out. The inspector doesn't move furniture or boxes to check for things. At least here they don't. There was a leak at one point in the house (different area) which they fixed and disclosed. And I suppose that by telling us at closing they were disclosing the current leak too. Like the other poster said, $$ should have been held in escrow until it was fixed.

 

[Luvchefmic]

1) OK, I will admit to a sneaky little ploy.
2) We have moved seven times due to job promotions and job changes.
3) Twice, we thought the seller was unreasonable during negotiations.
4) The seller would not budge enough.
5) So, AT THE CLOSING TABLE for we asked for reductions.
6) In both cases, we saved mega-bucks.
7) No seller wants to have the buyer back out at the last minute.
8) They are afraid it will take a long time to relist, show, and close the second time.
9) It is a great little tactic.

WOW if I was a seller and you pulled that stunt at closing I would have called your bluff BIG time, we would have sat across from each other and I would not give in You would have accepted the agreed to negotiations or walked out of there with your arrogant tail between your legs AND forfeited your deposit

 

[abolanwoski]

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

We just moved and it took 4 packers and and 4 movers 3 days to pack and load a 3500 sq ft house including piano, sleigh bed, HUGE dining table etc. It was just shy of 18000 lbs in household goods. Not everyone lives in a 900 sq ft apt with 10 pieces of Ikea furniture that their buddies can move for them

There is no way I would ask (or trust) my friends to move my antique breakfront or Thomasville marble top dresser. Fortunately, the military pays for my moves, so it's not an issue but if I had to pay to move this stuff it probably would have been close to 6k.

 

[distherapy]

We just sold our house and the closing was delayed 3 times. The realtor said she hasn't had an on time closing in months (delays were bank documentation related).

 

[LadyBeBop]

Sorry for the delay.

Then what happens...do you get to keep their deposit?

No Some clause about not having to keep the deposit.

I'm truly astonished...here a real estate transaction can not go firm until PROOF of financing is provided to the seller's brokerage agency in the form of a (legally binding) mortgage commitment from the buyer's lender or an agreement from the present lender to allow the buyer to assume the existing financing. The onus is on the lender to qualify the buyer and the property (very strict federal regulations for income to debt ratio and the property MUST appraise for at least as much as the selling price). Until financing is confirmed the offer is "conditional" only and there is a time limit specified in the contract for conditions to be satisfied. If financing can't be arranged by that date the deal dies unless the seller agrees to an extension. (Conditional deals are also subject to additional offers coming in during that period but the seller must give the buyer First Right of Refusal at the agreed upon price and terms). Realtors almost never continue to show properties that are C/S and almost all homebuyers get pre-approved for a mortgage amount before they start shopping.

It's the same way now. Unfortunately, this happened in 2004, four years before the housing market collapse. That was the era in which you practically was guaranteed a loan.

We actually had two offers at the same time. For about the same. Unfortunately, we picked the wrong one. And by the time of the aborted closing, the other party already bought their house.

Still upset.

 

[seashoreCM]

A savvy buyer does not waive the financing contingency clause unless he can actually "pay cash."

Then "cash to close" does not include the amount of the financing (the 80% if the buyer would put down 20%) if the latter is withdrawn by the bank or mortgage company.

The buyer should not accept a condition that in the event of falling through of financing he would accept alternate financing suggested by the seller that might be regarded as subprime or that contains a balloon (q.v.) payment.

I recommend that buyers, too, engage their own attorney who knows real estate. The attorney for the mortgage bank, whose charge to the buyer is almost always shown in the closing documents, does not count.

 

[sweetdana]

We just sold our house and the closing was delayed 3 times. The realtor said she hasn't had an on time closing in months (delays were bank documentation related).

I have worked at mortgage co for 10 yrs. in 2003- 2005 ish closing happened on time, and if things were missing we just made exceptions. Unfortunately foreclosing due to accepting file as is, has changed the industry as a whole. Now every duck has to be in a row, and yup we miss closing dates all the time. It isn't a goal, but it is re-requesting a 4th bank statement cause there are still days missing, or no URL, or a random 700$ deposit, or employer won't comment on if employment will continue. You name it, we move closing.

 

[Srbright]

2) But have you ever
. . . had a car mechanic claim at pickup that it is more than the estimate?

Nope, in MI that is illegal. The bill has to be within a certain % of estimate. If its not, they have to inform you and get your approval. If they don't then they can't charge you more.

. . . had a doctor say the bill is higher than original guess?
No

. . . had a home repair contract where costs kept going higher and higher?
No, see mechanic above.

. . . has a person you know or saw get a GAC at Disney when not entitled?
This makes you think two wrongs make a right?

. . . had a mover charge more upon arrival due to more boxes than predicted?
Nope. Both times we've been professionally moved it is at a flat negotiated rate.

. . . had a lease car where you tried to re-negotiate miles at the end of lease?
N/A for us

. . . had a grocer cut meat a little over the 1-pound you requested?
Nope, it is weighed after its cut.

. . . had a dessert on Disney DDP, even though you didn't want one?
No, why would we?

. . . had an electric company increase rates to pay for a power plant that was never built?
This one I don't know

. . . had a politician promise something that they didn't even try to fulfill?
So you're a politician?

. . . had an agreement with your spouse that was changed by the other at the last moment?
Not if he knows what's good for him...

. . . had a taxi take an extra block or two to your destination?
No, and I lived in NYC.

. . . had a deal somewhere, then found a coupon, then wanted the discount?
Only at places where they advertise that they match prices.

. . . had an airline have a delay and not give you compensation for food?
HECK NO! Delta routed us on the direct flight from Frankfurt back to Detroit to Cleveland instead because of severe weather. We sat on the run way for 3 hours. Not only did I get comped they returned, in cash, the amount I paid for my upgrade.

. . . had a request for a comp at WDW even though your problem was that big?
No

. . . had an occasion to ask a service/repair person to do something extra for you?
Only if we pay

. . . had a rental security deposit used by you as the last month's rent?
Nope

. . . had a car rental company charge you days later for minor nicks and dings?
Nope

. . . had a product shipped or delivered to you far later than the promised date?
Nope

. . . had a WDW ressie, found Free Dining, then wanted it added after your original ressie?
Yes, because it is policy to be allowed.

You seem to believe that because there are other people that behave badly that it allows you to behave badly (and with a clear conscious).

Stacy

 

[BackstoryWorthy]

2) But have you ever
. . . had a car mechanic claim at pickup that it is more than the estimate?

Nope, in MI that is illegal. The bill has to be within a certain % of estimate. If its not, they have to inform you and get your approval. If they don't then they can't charge you more.

. . . had a doctor say the bill is higher than original guess?
No

. . . had a home repair contract where costs kept going higher and higher?
No, see mechanic above.

. . . has a person you know or saw get a GAC at Disney when not entitled?
This makes you think two wrongs make a right?

. . . had a mover charge more upon arrival due to more boxes than predicted?
Nope. Both times we've been professionally moved it is at a flat negotiated rate.

. . . had a lease car where you tried to re-negotiate miles at the end of lease?
N/A for us

. . . had a grocer cut meat a little over the 1-pound you requested?
Nope, it is weighed after its cut.

. . . had a dessert on Disney DDP, even though you didn't want one?
No, why would we?

. . . had an electric company increase rates to pay for a power plant that was never built?
This one I don't know

. . . had a politician promise something that they didn't even try to fulfill?
So you're a politician?

. . . had an agreement with your spouse that was changed by the other at the last moment?
Not if he knows what's good for him...

. . . had a taxi take an extra block or two to your destination?
No, and I lived in NYC.

. . . had a deal somewhere, then found a coupon, then wanted the discount?
Only at places where they advertise that they match prices.

. . . had an airline have a delay and not give you compensation for food?
HECK NO! Delta routed us on the direct flight from Frankfurt back to Detroit to Cleveland instead because of severe weather. We sat on the run way for 3 hours. Not only did I get comped they returned, in cash, the amount I paid for my upgrade.

. . . had a request for a comp at WDW even though your problem was that big?
No

. . . had an occasion to ask a service/repair person to do something extra for you?
Only if we pay

. . . had a rental security deposit used by you as the last month's rent?
Nope

. . . had a car rental company charge you days later for minor nicks and dings?
Nope

. . . had a product shipped or delivered to you far later than the promised date?
Nope

. . . had a WDW ressie, found Free Dining, then wanted it added after your original ressie?
Yes, because it is policy to be allowed.

You seem to believe that because there are other people that behave badly that it allows you to behave badly (and with a clear conscious).
Stacy

 

[seashoreCM]

One pitfall with delaying the closing (sometimes unavoidable): The mortgage commitment could expire and interest rates have risen and the buyer doesn't qualify any more. Goodbye deal, earnest money returned.