Monday, July 28, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Confusion about selling, buying a house simultaneously

By
From page C2 | May 11, 2013 |

Q:  We have owned our current house for almost 15 years now.  It was our first home. We would like to shop for a new home in a nicer area but we’re confused regarding the logistics of shopping for a new home at the same time you’re trying to sell one.  We are one of those few who have equity in our house. But if we sell this house first we will be homeless until we find and close on a new home.  We have been hearing about how hard it can be to get an offer accepted and we don’t want to get caught in a tough spot of leaving this home and not having a place to go. How do other people handle this?
 
A:  For homeowners in your position, this is a much bigger problem than it was even a couple of years ago.

While there is a ton of cash in the real estate market right now, most of it is investor money and not coming from people who want to actually live in the property.

Most people in your position don’t have the ability to pay cash for a new house and must rely on the equity of their current home. By far the two most common ways of handling the whole transaction is to put your current house on the market while you are shopping for a new one.  Or, in the alternative, identify your new home and then put your current house on the market.

There is a third choice that we’ll discuss in a minute.

Whether or not to put your current home on the market before shopping for your new one is a decision you need to make with your Realtor, based upon the current market conditions. When it is a seller’s market, meaning that there are more buyers than sellers as it is right now, you can wait to put your home up for sale. The theory is that it will take you longer to find and buy a home in a seller’s market.  But it won’t take you very long to sell your current property since there are so many buyers.

The opposite theory applies when it’s a buyer’s market, meaning there are more homes on the market than buyers to buy them. In this scenario it will take you longer to sell your home than to buy the new one.

In either event, the purchase contract you enter into will be contingent upon closing escrow on your current property.  Nowadays, that’s a problem. The reason is simply that a vast majority of the houses on the market are short sales and require the seller’s bank to approve the transaction. Their bank won’t care that you’re a nice couple who actually want to live there.

If you’re competing with an all-cash offer, the bank won’t even sniff at a contingency offer like yours.

The third option I referred to earlier is known as a bridge loan. Bridge loans are nothing more than a short-term loan given to you by your lender to allow you to get into the new home before selling your old one. Once your old home sells you immediately pay off the bridge loan.

Bridge loans usually carry a very high interest rate and can be difficult to get. The advantage, however, is they help to make for a smoother move. However, the availability of such loans in the aftermath of the great recession is questionable. That’s where the guidance of a good mortgage broker is needed.

If you have enough equity above and beyond what you need to get into the new house, this could be an option.
So which scenario is best for you?  I don’t know.

A good Realtor can help guide both transactions to a simultaneous close and, in an ideal situation since you aren’t short selling your home, give you a short rent back in your existing home so you’ll have time to move out.

But your agent can never guarantee that delays won’t take place in one or both escrows.

Personally, I think most people would be happier with the bridge loan, if they can get one.  It may be expensive but it will take a lot of the pressure off of the whole process. If you don’t qualify for a bridge loan you can take heart in the knowledge that this type of transaction takes place thousands of times each day and most happen without any catastrophic problems.

Tim Jones is a real estate attorney in Fairfield. If you have any real estate questions you would like to have answered in this column you can contact him at SolanoScene@TJones-Law.com.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

Rodriguez student collects, stuffs backpacks for others

By Amy Maginnis-Honey | From Page: A1 | Gallery

 
30 years ago, Art Koch died keeping the city safe

By Amy Maginnis-Honey | From Page: A1, 2 Comments | Gallery

Relay for Life of Fairfield was super

By Tony Wade | From Page: A2

 
Weather for Monday, July 28, 2014

By Daily Republic staff | From Page: B2

Artistic ingenuity unhinged at Contraptor’s Road Rally

By Adrienne Harris | From Page: A3 | Gallery

 
Rockville Trail hike offered

By Susan Hiland | From Page: A3

 
National Alliance on Mental Illness meeting Monday

By Susan Hiland | From Page: A3

Summertime Fill the Barrel Food Drive ends Thursday

By Susan Hiland | From Page: A3

 
Live music at Solano Town Center mall

By Susan Hiland | From Page: A3

County fair opens Wednesday in Vallejo

By Susan Hiland | From Page: A3

 
Food preservation class at library

By Susan Hiland | From Page: A3

Canines graduate from CHP training academy

By Adrienne Harris | From Page: A3

 
GV Cellars to host Food Bank fundraiser

By Susan Hiland | From Page: A4

 
Suisun police log: July 26, 2014

By Susan Hiland | From Page: A9

Fairfield police log: July 26, 2014

By Susan Hiland | From Page: A9

 
Business workshop addresses marketing

By Barry Eberling | From Page: A10

Fairfield gets new pizza shop

By Barry Eberling | From Page: A10 | Gallery

 
Renowned cardiovascular surgeon comes to NorthBay

By Barry Eberling | From Page: A10

.

US / World

Bills aim to bring family law into 21st century

By The Associated Press | From Page: A1

 
UConn makes 3-D copies of antique instrument parts

By The Associated Press | From Page: A1

Family law bills proposed in California

By The Associated Press | From Page: A1

 
Man dies after lightning strikes 14 in California

By The Associated Press | From Page: A3

California governor to meet with Mexican president

By The Associated Press | From Page: A4

 
Study: Blue whales at risk of hitting ships

By The Associated Press | From Page: A4

Gaza war rages despite Hamas, Israel truce pledges

By The Associated Press | From Page: A5

 
Fighting intensifies near MH17 disaster site

By The Associated Press | From Page: A5

.

Opinion

It’s clear: Israel wants West Bank, not peace

By Jack Batson | From Page: A8

 
Arrogance of power evident

By Earl Heal | From Page: A8

 
California’s death penalty dying of old age

By Dan Walters | From Page: A8

Editorial Cartoon: July 28, 2014

By Daily Republic Syndicated Content | From Page: A8

 
District needs peanut-free schools

By Letter to the Editor | From Page: A8, 1 Comment

.

Living

Today in History for July 28, 2014

By The Associated Press | From Page: A2

 
Community Calendar: July 28, 2014

By Susan Hiland | From Page: A2

Randall: Why a ‘liar’ loves to hear from readers

By Sharon Randall | From Page: B5

 
My 33-year-old daughter blames me for all her problems

By Kathy Mitchell and Marcy Sugar | From Page: A7

Horoscopes for July 28, 2014

By Holiday Mathis | From Page: A7

 
.

Entertainment

Comic-Con: Kingsley voices animated villain in ‘Boxtrolls’

By The Associated Press | From Page: B6

 
‘Lucy’ tops ‘Hercules’ with $44M at box office

By The Associated Press | From Page: B6

TVGrid July 29

By Daily Republic Syndicated Content | From Page: B6

 
Comic-Con’s dark side: Harassment amid the fantasy

By The Associated Press | From Page: B6

Comic-Con: ‘Hobbit’ cast tease trailer, bloopers

By The Associated Press | From Page: B6

 
Comic-Con: 4 DC Comics brought to TV get event

By The Associated Press | From Page: B6

Comic-Con: Radcliffe goes undercover as Spidey

By The Associated Press | From Page: B6

 
Comic-Con: ‘Ant-Man’ cast revealed: Lilly, Douglas, Rudd

By The Associated Press | From Page: B6

 
Comic-Con: ‘Blacklist’ fans get black fedoras

By The Associated Press | From Page: B6

‘The Vampire Diaries’ takes bite out of Comic-Con

By The Associated Press | From Page: B6

 
Comic-Con: ‘Batman v Superman’ stare-down

By The Associated Press | From Page: B6

Comic-Con: Godzilla sequel announced

By The Associated Press | From Page: B6

 
Comic-Con: ‘Avengers’ unleash ‘Ultron’ footage

By The Associated Press | From Page: B6

TV team: Actor, detective role paired for 25 years

By The Associated Press | From Page: B6

 
TVGrid July 28

By Daily Republic Syndicated Content | From Page: A10

.

Sports

McGloin buried on Raiders depth chart again

By The Associated Press | From Page: B1

 
Giants lose in Peavy’s debut, swept by Dodgers

By The Associated Press | From Page: B1 | Gallery

Lawrence Okoye preparing for the NFL

By The Associated Press | From Page: B1 | Gallery

 
 
It’s ‘Jeff Gordon Day’ at Indy for record 5th time

By The Associated Press | From Page: B1 | Gallery

Jaso has 3 RBIs as A’s beat Rangers 9-3

By The Associated Press | From Page: B2

 
Horsey wins Russian Open in playoff

By The Associated Press | From Page: B2

Tim Clark rallies to win Canadian Open

By The Associated Press | From Page: B2

 
Spain sweeps to victory in International Crown

By The Associated Press | From Page: B2

Langer wins Senior British Open by record 13 shots

By The Associated Press | From Page: B2

 
Mudcats take pair from Pro Player Baseball

By Daily Republic staff | From Page: B2

The Big Hurt and Joe Torre headline HOF class

By The Associated Press | From Page: B2 | Gallery

 
Italy’s Vincenzo Nibali wins Tour de France

By The Associated Press | From Page: B2 | Gallery

LeBron deep-sixes number; will be No. 23 with Cavs

By The Associated Press | From Page: B2

 
Byron Scott says he will be LA Lakers’ new coach

By The Associated Press | From Page: B2

This date in sports history for Monday, July 28, 2014

By The Associated Press | From Page: B3

 
.

Business

.

Obituaries

Elizabeth Terry

By Adrienne Harris | From Page: A4

 
Robert Dale Myers Sr.

By Nancy Green | From Page: A4

.

Comics

Frank and Ernest July 29

By Daily Republic Syndicated Content | From Page: B4

 
Beetle Bailey July 29

By Daily Republic Syndicated Content | From Page: B4

Peanuts July 29

By Daily Republic Syndicated Content | From Page: B4

 
B.C. July 29

By Daily Republic Syndicated Content | From Page: B4

For Better or Worse July 29

By Daily Republic Syndicated Content | From Page: B4

 
Get Fuzzy July 29

By Daily Republic Syndicated Content | From Page: B4

Wizard of Id July 29

By Daily Republic Syndicated Content | From Page: B4

 
Baldo July 29

By Daily Republic Syndicated Content | From Page: B4

Dilbert July 29

By Daily Republic Syndicated Content | From Page: B4

 
Baby Blues July 29

By Daily Republic Syndicated Content | From Page: B4

Sally Forth July 29

By Daily Republic Syndicated Content | From Page: B4

 
Rose is Rose July 29

By Daily Republic Syndicated Content | From Page: B4

Blondie July 29

By Daily Republic Syndicated Content | From Page: B4

 
Zits July 29

By Daily Republic Syndicated Content | From Page: B4

Garfield July 29

By Daily Republic Syndicated Content | From Page: B4

 
Pickles July 29

By Daily Republic Syndicated Content | From Page: B4

Bridge July 29

By Daily Republic Syndicated Content | From Page: B5

 
Crossword July 29

By Daily Republic Syndicated Content | From Page: B5

Cryptoquote July 29

By Daily Republic Syndicated Content | From Page: B5

 
Word Sleuth July 29

By Daily Republic Syndicated Content | From Page: B5

Sudoku July 29

By Daily Republic Syndicated Content | From Page: B5

 
Sally Forth July 28

By Daily Republic Syndicated Content | From Page: A6

Zits July 28

By Daily Republic Syndicated Content | From Page: A6

 
Dilbert July 28

By Daily Republic Syndicated Content | From Page: A6

Get Fuzzy July 28

By Daily Republic Syndicated Content | From Page: A6

 
Rose is Rose July 28

By Daily Republic Syndicated Content | From Page: A6

For Better or Worse July 28

By Daily Republic Syndicated Content | From Page: A6

 
B.C. July 28

By Daily Republic Syndicated Content | From Page: A6

Wizard of Id July 28

By Daily Republic Syndicated Content | From Page: A6

 
Baldo July 28

By Daily Republic Syndicated Content | From Page: A6

Blondie July 28

By Daily Republic Syndicated Content | From Page: A6

 
Baby Blues July 28

By Daily Republic Syndicated Content | From Page: A6

Beetle Bailey July 28

By Daily Republic Syndicated Content | From Page: A6

 
Pickles July 28

By Daily Republic Syndicated Content | From Page: A6

Garfield July 28

By Daily Republic Syndicated Content | From Page: A6

 
Peanuts July 28

By Daily Republic Syndicated Content | From Page: A6

Frank and Ernest July 28

By Daily Republic Syndicated Content | From Page: A6

 
Sudoku July 28

By Daily Republic Syndicated Content | From Page: A7

Crossword July 28

By Daily Republic Syndicated Content | From Page: A7

 
Bridge July 28

By Daily Republic Syndicated Content | From Page: A7

Word Sleuth July 28

By Daily Republic Syndicated Content | From Page: A7

 
Cryptoquote July 28

By Daily Republic Syndicated Content | From Page: A7