Timing is key when selling one home to buy another
Chandra Orr
Copley News Service

Selling one house to buy another is all about the timing.
Sell too soon and you could find yourself with no place to live. Buy too soon and you could wind up with a double mortgage.
The key to making a smooth transition is in the planning. When swapping one home for another, it pays to plan for every possible scenario.
"You need to have a very realistic approach to the whole thing," said Carl Agard, real estate broker and author of "Getting the Real Out of Real Estate." ($19.95, Adelphi Publishing and Media Group).
"There are so many factors that you can't control," he says. "It depends on how fast you can sell your old home, how quickly the buyer can get a mortgage and how quick you are to close on a new home.
"You want to have a contingency plan for the best case scenario and the worst case scenario."
The best case scenario? Your home flies off the market, you find your dream house and both closings give you enough time to make the move without overlapping mortgages. No problem.
"The best thing is to sell your house first and use that money to buy another home, then you don't have to pay two mortgages, but a lot of the process is difficult to control," Agard said.
The worst case scenarios are the ones you really have to plan ahead for. No homeowner wants to get stuck with two mortgages - or worse yet, no place to live. According to Agard, there are a few things homeowners can do to prevent such disasters:
- Worst Case Scenario No.1: You find the home of your dreams, but you haven't sold the old house yet.
Solution: It is possible to build a contingency plan into the contract on your new home.
Say you want to sign a contract for a brand new home in Atlanta, but you haven't sold your old place in New York yet. Ask for a contingency contract.
"Then, you're not forced to close on the new home beforehand and pay two mortgages," Agard explained. "Your purchase of the new home is contingent upon selling your old home."
If you're lucky enough to find a house in a new development, consider signing up for a home in a future phase of the development instead of snagging a home that's ready and waiting for an occupant. If you time it just right, you'll be closing on your old home when developers put the final touches on your new house.
- Worst Case Scenario No.2: You're set to close on your new home, but the buyer for your old home is holding up the process.
Solution: Put a penalty clause in the contract on your old home.
Plenty can go wrong when the person buying your old home sends the schedule veering off track. To avoid delays and a double mortgage, consider putting a penalty clause in the contract.
"Everything is negotiable, and every situation is different," Agard said. "You can put it in the contract that the buyer has to pay a penalty if they don't close on the house within a certain timeframe.
"Then, if the person buying your old home is holding up process, you're not paying two mortgages at once."
- Worst Case Scenario No.3: You sell your house, but you're not even close to finding a new home yet.
Solution: Consider renting.
This is perhaps the best of the worst case scenarios. With no mortgage hanging over your head, you're free to consider a range of options.
Short-term leases, rentals and hotels offer quick fixes, and plenty of family members may be willing to take you in temporarily.
It means moving twice, but with a little planning, this can be a smooth transition. Plan ahead for such an event by pricing rental units, storage units and moving.