home seller

4 Tips To Buying And Selling A Home Simultaneously

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Want to sell your current home and buy your new house simultaneously?

  1. Don’t get a house under contract to buy until your home for sale goes under contract.  Going under contract to buy without yet finding a buyer for your home will put way too much pressure to accept unfavorable terms for the sale of your home.  Keep in mind that most sellers want their home sold in 45 days or less. That means, if you go under contract to buy, you only have a limited time to sell.
  2. As you are making an offer to buy, don’t make the purchase contingent on the sale of your home.  I have yet to meet a seller that will wait till you sell your home to buy theirs. Would you?  Disclosing the latter is disclosing a weakness (your need to sell before your buy) during negotiations. There are many other terms which give you ways out of a contract without disclosing weakness. Just make sure your agent explains them to you.
  3. Request from buyers that are buying your house to let you stay (rent) in the home for a few days after closing. There is a 50%-50% chance that the buyers will agree, so there is nothing to lose.
  4. A simultaneous purchase and sale involves some risk. So when it comes to making a decision and your head is saying “don’t do it”, but your guts are saying “yes”?  Do it! Specially in a double closing, it is the time to be aggressive.

Got An Offer? Know What’s A Solid Escrow Amount

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There is no standard as to the amount of money you should receive in escrow when getting an offer. But when representing a seller, I usually want the amount to be somewhere between 3% and 5% of purchase price.  Why? The more money there is on the table, the more motivated a buyer will be to close the deal.  Off course, we know the buyer would want to close simply because they want the house.  But knowing there is money at stake without them yet being the owners…trust me…it elevates motivation.

Its kinda like what Tony Robbins says. What’s stronger than wanting something so bad? The fear of loosing it. And no one likes to loose money.

As far as the escrow agent. Again, when representing the seller, I let the buyer make the choice. I’ve heard other real estate agents say that it is in the interest of the seller to pick the escrow agent so they have control of the money. Not true.

As long as the buyer’s money sits in a title or escrow company created in the State of Florida, the money cannot go anywhere unless both buyers and sellers agree to where it goes.  If the title company or escrow agent does not follow the latter, they are breaking the law.

A real estate contract also allows control of when to make such escrow deposits. And you basically have three option.  Say you got an offer for $500,000 and the escrow deposit amount is $20,000.

  1. You may get the deposit all up front when the contract is executed.
  2. Or split in two…say $10,000 when the contract gets executed and the remaining $10,000 “X” numbers of days after the contract is executed.
  3. Or you may get the entire deposit “X” number of days after the contract is executed.

(What is an executed contract?)

What’s my advice? I always negotiate to get 50% of it upon execution of contract and the remaining 50% no later than when the inspection period ends. Say the offer you get allows the buyer 10 days inspection period. For the above example, I would demand $10,000 up front and $10,000 on the 10th day. Why?

Because the inspection period gives the buyers absolute discretion to cancel deal.  Yup…they don’t have to even give you a reason. Get the logic?

However, once we get passed the inspection period, things change. That’s when things get a lot more serious and the fun begins.

Got an offer? And want a second opinion on the escrow amount you are being offered? Contact me today!

Four Must-Look-Out Seller Contract Deadlines

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Among other terms, below are 4 primary contract contingencies established between you and the other party to look out for.

Cash or Financed Transactions

  • Inspection: Upon completion of property inspections within inspection period established between seller and buyer, buyer may withdraw/renegotiate their offer based on inspection findings without risk of losing escrow.
  • Clean Title: This is a seller contingency. So as long as seller provides clean and marketable title, buyer cannot utilize this contingency to withdraw/renegotiate their offer based on title findings without risk of losing escrow.

Financed Transaction Only

  • Appraisal: Upon completion of appraisal within appraisal period established between seller and buyer, buyer may withdraw/renegotiate their offer should appraisal value come in below purchase price without risk of losing escrow.
  • Letter of Commitment (LOC) or Loan Guarantee: Buyer must provide LOC to seller within LOC period established between seller and buyer in order to withdraw/renegotiate their offer based on buyer’s lender’s ability to guarantee the loan without risk of losing escrow.

More Tips?