As anyone who's been through it can tell you, selling your property while simultaneously buying a new home is tricky. You might be prepared to temporarily foot two mortgages, but what if you find your dream home only to watch it slip away at the last minute at the hands of a fickle seller? As scary as it sounds, it's important to be prepared for the unexpected. Below are some of your best options should your seller back out when you're ready to sign on the dotted line for both transactions.
Tempt Your Buyers to Wait
If you and your buyers have already settled on a closing date, your first instinct may be to firmly ask them to push it back, but that can be a high-risk move, especially if that day is fast approaching. Questioning your commitment might nudge your buyers to give you a strict ultimatum or to pull out of the prospective deal altogether. A better strategy – and one that paints you in a more positive light – is to charm them with incentives.
As in most business transactions, financial rewards usually work best in these types of situations. If your buyers are able to sit tight for a few weeks until you work things out with your old seller or find a new property, offer to pay their rent, utilities, and any fees they might incur while staying past their original lease. Another thing you can do is to take back responsibility for financial burdens that you planned to pass on to the buyers, like repairs or home warranty.
What If They Say No?
Of course, if the date isn't specified in your contract, you can always backtrack and restart the process all over again. If the date is firm, your options beyond moving into a temporary rental are few, but not all is lost just yet. Becoming a renter in your own home by entering into what's called a rent-back contract can work well for both sides of the table, but be prepared to offer your buyers favorable terms, like a higher monthly rent than your home would normally fetch on the open market.
Whichever solution you want to pursue, be sure to talk it over with real estate attorneys to mitigate your risks as well as you can. If you're able to cover a few extra costs upfront, involving your attorney even earlier, in the beginning stages of the renegotiation process, is a smart way to minimize your overall losses by protecting yourself against unforeseen consequences down the road.