Real Estate

Closing date of home sold and closing date of puchased home

  • Last Updated:
  • Feb 17th, 2018 11:11 am
[OP]
Newbie
Jan 30, 2018
26 posts
9 upvotes

Closing date of home sold and closing date of puchased home

I have sold my home. Closing is at the end of April.

I want to put an offer on a home and also make the closing date end of April.

I cannot close on purchase earlier because I need the funds from the sale of my home.

Has anyone been in this situation. Is it okay to have closing dates close to each other or should the closing date on purchased property a few days or weeks after?
Last edited by tekkspekk29 on Feb 12th, 2018 11:26 pm, edited 1 time in total.
12 replies
Deal Addict
Oct 13, 2014
2221 posts
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Just Moved To Somewh…
The date of closing is between your bank and yourself and whether there is available funds, etc.

I have always closed the date on a purchase about 1 week before the close on my sale. This allowed me a week to do the move and cleanup on each of the properties. In my case the bank would advance the funds required to close on the new which I believe was called Interim Financing.

As for closing on the purchase of the new after the sale of the old it would be entirely up to you, however you would have to then arrange for storage of your household effects or the cost of keeping your effects in the moving van for that time period.
“Don’t irritate old people. The older they get, the less “Life in prison” is a deterrent."
Member
Aug 5, 2010
396 posts
143 upvotes
Talk to your bank about "bridge financing" - pretty common to cover the week or so where you own both homes. Used it years ago and was reasonable, allowing us to get in and paint the new house while slowly moving out of the old.
Deal Addict
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Oct 24, 2016
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ON
I had my sale and purchase close on the same day. Although everything went smoothly without any issues, I wouldn’t advise anyone to do this because as the D day approaches you start getting stressed out thinking, what if....? Better to get bridge financing and have a gap in between.
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Sr. Member
Jun 7, 2017
980 posts
730 upvotes
BC
tekkspekk29 wrote: I have sold my home. Closing is at the end of April.
It’s just tentatively sold until close. Many stories of buyers not closing last summer. I wonder how many cases like OP’s blew up.
Sr. Member
Dec 4, 2004
725 posts
725 upvotes
GTA
Holystone wrote: I had my sale and purchase close on the same day. Although everything went smoothly without any issues, I wouldn’t advise anyone to do this because as the D day approaches you start getting stressed out thinking, what if....? Better to get bridge financing and have a gap in between.
I have also done the same day closing and it is definitely more stressful with many more ways things can go wrong. Remember that there is no guarantee that your lawyer can deliver keys to you on the closing day. Best to leave a couple of days in between closing dates, and not over a weekend.
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Feb 2, 2014
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Toronto
tekkspekk29 wrote: I have sold my home. Closing is at the end of April.

I want to put an offer on a home and also make the closing date end of April.

I cannot close on purchase earlier because I need the funds from the sale of my home.

Has anyone been in this situation. Is it okay to have closing dates close to each other or should the closing date on purchased property a few days or weeks after?
You can close on the purchase before the sale and apply for bridge financing to help with the down payment. Current home has to be sold firm however.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
Jun 6, 2017
2 posts
3 upvotes
It is considered best practice to have separate closing dates for each transaction or arrange bridge financing.

The dilemma with having the closing of both properties on the same date is that if for whatever reason the purchaser of your property is unable to close (pay the full amount of the purchase price or requires an extension ex. they need more time to arrange to finance) then you will have insufficient funds to close the purchase of your new property. Failure to purchase your new property on the agreed upon closing date can have severe consequences including, amongst other things, the right to purchase that house and payment of damages to the seller.
Deal Fanatic
Jul 3, 2011
5892 posts
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Thornhill
Fantastic answer!

This is not the hot market of before whereby the buyer of your property backing out was not even given any thought. The prudent practice prior to that market and now should be to close your sale first, bridge a temporary move elsewhere instead of a mortgage. The cost to do that is no more than the cost of a bridge mortgage.
RLlawyer wrote: It is considered best practice to have separate closing dates for each transaction or arrange bridge financing.

The dilemma with having the closing of both properties on the same date is that if for whatever reason the purchaser of your property is unable to close (pay the full amount of the purchase price or requires an extension ex. they need more time to arrange to finance) then you will have insufficient funds to close the purchase of your new property. Failure to purchase your new property on the agreed upon closing date can have severe consequences including, amongst other things, the right to purchase that house and payment of damages to the seller.
Deal Addict
Dec 4, 2016
1903 posts
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You can always make the offer to buy conditional on successful closing of your current home. The seller will be free to accept or reject this offer. My in-laws had similar conditions when they retired and moved from city center to the distance suburbs. It was a fairly hot market, but in the end both deals closed. The prices were rather volatile at that time, so I can't really say how much that affected the sale price of both properties.
Sr. Member
Jun 7, 2017
980 posts
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BC
BlueSolstice wrote: You can always make the offer to buy conditional on successful closing of your current home. The seller will be free to accept or reject this offer
I have *never* heard of a seller accepting this. Any REs care to chime in with their experience?
Deal Addict
Jul 3, 2007
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Toronto
It's been done before but it's rare...
Member
Dec 28, 2017
336 posts
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Burlington
bridge financing would be the way to go.
if the buyer backs out from the offer, it's going to be complicated.. usually the legal route is the way to go to force the buyers to honor their agreement.

You can ask your lawyer to send a letter (if he/she backs out from the purchase) to pay for all cost and losses associate to failure to close. Deposits are usually forfeited .. then any price difference to sell your new home or existing home.

just remember, don't panic if anything bad happens, it won't help the situation.

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