Buying and selling a house or property on the same day can seem like a convenient and hassle-free approach, right? In a perfect world, it makes sense. However, if you’re considering simultaneous closings, there are a few things to keep in mind. While there are certainly benefits that come along with simultaneous closings, there are also some potential risks and pitfalls that can make the process less than ideal.
In this blog post, we’ll explore the pros and cons of simultaneous closings when purchasing or selling a home. We’ll take a closer look at the benefits and drawbacks of this approach. Then you can better understand what you’re getting yourself into and make an informed decision that’s right for you.
Pros of Simultaneous Closings:
One of the biggest benefits of simultaneous closings is that it can be more convenient and cost-effective than traditional sales. For example, if you’re purchasing a new home and want to sell your current one, simultaneous closings can help you avoid paying two mortgages at once. Additionally, you’ll will have one mortgage payment after both transactions closing, which can save you a lot of money in the long run.
Another pro of simultaneous closings is that it can save you time. Instead of dragging out the process over several weeks or months, you can complete both transactions on the same day. This can be especially advantageous for people who are in a hurry to move and don’t want to wait around for a buyer or a seller to come through.
Cons of Simultaneous Closings:
One of the biggest drawbacks of simultaneous closings is that they require a significant amount of coordination and timing. Any unforeseen circumstance in legal or financial issues can cause significant delays and impact the transaction closing on time. There is just no margin for error.
Additionally, there are certain situations where simultaneous closings may not be possible. For example, if the buyer needs to secure financing, but the sale of their own home is not yet final, they may not be able to close on their new property until the old one is sold. If either transaction falls through, everything else falls through with it – leaving you back at square one.
Another potential drawback of simultaneous closings is that they can be more stressful and overwhelming than traditional sales. You’re dealing with two properties, two sets of negotiations, two sets of paperwork, and two separate closing procedures. This can be a lot to handle, especially if you’re unfamiliar with handling complex real estate transactions.
One of the most common risks for delays is obtaining funds from the buyers’ lender, which could result in the delay of a few hours or even a whole day.
Or, failure to obtain proof of insurance required by the lender could result in a delay in closing the sale.
Other possible risks could include issues with property inspections, appraisals, or with the title clearance, which could also cause delays.
This can lead to a chaotic situation where agreements need to be made quickly, which can cause anxiety and stress for buyers and sellers.
Our recommendations?
- Avoid having your purchase and sale transactions close on the same day if possible.
- Minimize potential disruptions by arranging any third-party services such as cleaners or movers on any day except possession day.
- Have a contingency plan in case the closing is delayed.
- Have a backup living arrangement or storage unit for your belongings.
While simultaneous closings can be beneficial under the right circumstances, they’re not always the best or safest option. Take the time to weigh the pros and cons of this approach, so you can make an informed decision that’s right for your situation.
Ultimately, if you’re considering simultaneous closings, it’s always a good idea to consult with a qualified real estate lawyer so that they can help you understand the specific steps, risks, and timing demands involved. With expert guidance and planning, you can mitigate risks and increase the chances of a successful and complication-free simultaneous closing.
