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Conducting multiple real estate transactions at once

On Behalf of | Oct 30, 2018 | Residential Real Estate |

Individuals in California and other states may find themselves in a situation where they have to buy and sell a home at the same time. Choosing to sell a home first may be the better option. However, it may require asking for a rent-back clause in the purchase contract. This allows an individual to remain in the home and pay rent to the new owner until he or she buys a new house.

Those who are planning on buying a new home first may want to consider making it contingent on selling their current property first. Alternatively, it is possible to own both homes at the same time. However, this may put a person in a financially perilous situation. It is also worth noting that many sellers won’t permit contingencies related to selling the home prior to the purchase closing.

A bridge loan might be an option for some who need to keep two properties at the same time. The bridge loan allows a homeowner to pay the mortgage on the current home, which is repaid when that property sells. The downside to this option is that bridge loans come with high interest rates. They may also have other inflexible terms that could be problematic if the home doesn’t sell in a timely manner.

When conducting a real estate transaction, it may be possible to negotiate contract terms tailored to fit the needs of both parties. For instance, a seller may agree to a specific closing date if the buyer doesn’t ask for any contingencies. A lawyer may be able to help someone negotiate a contract that makes it possible to close multiple transactions in a timely manner. Legal counsel may also help a person understand better what those terms mean.