Last year in November we closed on a house for my client in Winnetka. She paid $625,000. This was her first home. She spent 2 months renovating and furnishing it and making it gorgeous. In May, her mom fell ill and they made a decision to move her from New Jersey to Los Angeles, to live with my client. My client B, helped bring her mom over and they settled into a life together in this beautifully renovated house. Within a few weeks, B realized that the layout of the house was not working for her and her mom. B reached out to me to discuss what to do.
Since her mom was disabled, we had to find a new house that had a bedroom connected to a living space just for her mom, plus a bathroom that suited her needs. A layout like this would give B some privacy, but also allow her to be close enough to take care of her mom.
B had paid cash for her home, so she wanted to roll that money over into the purchase of her new home. She was not interested in taking out a loan. So that left us with one option: Concurrent Closings
What is a concurrent closing? A concurrent closing is when a sale and a purchase take place either on the same day or within a few days of one another.
We had a bit of an uphill battle ahead of us. There were alot of unknowns, such as:
- How much would her home sell for? (We needed that number to know what our budget would be for the new property)
- Would the seller of her new house be willing to accept our contingent offer? (i.e. Would they be willing to work with us since we can’t buy their home until B’s current home sale closes)
- Will we be able to find the house that she needs for her and her mom? (She had very specific requirements since her mom is disabled, also, she had a minimum dollar amount that she needed to earn in order to sell)
- How long will it take for her house to close and how do we time the offer on the new house?
The first step was to put the house on the market. This made the seller very nervous. She didn’t want to end up homeless, and neither did I! We had a very delicate chicken and egg situation on our hands. She wanted to shop for her next house, but didn’t want to sell until we had a place to move. She waffled back and forth about how to proceed. I outlined her options, supported her, and we discussed each microstep every step of the way.
Great news, almost instantly, we found the home that she loved! It had been on the market for over 4 months with no offers. That is the best kind of house when I am representing a buyer! We submitted our all cash offer (contingent on her current house closing). Sure enough, another buyer submitted an offer on the same day that did not have a sale contingency and we did not get the house. B was still not ready to put her house on the market.
SOMETHING HAS GOT TO GIVE
As I told B, something has got to give in this equation. We need to put her house on the market and get that going so that we can prove to the seller of her next house that we are that much closer to closing and having the funds to purchase their house. She reluctantly agreed. We put her gorgeous home on the market and set up the first Open House for the coming weekend. Then….the Santa Ana winds started blowing and areas 6 miles North of her home were on fire. The air was smoke filled and there was a dark grey plume floating above the city. We had to cancel the open house.
The following weekend, her mom got sick, and we couldn’t show the house again. More false starts.
Eventually, we were able to hold an Open House and we had a huge turnout! Offers started coming in. We ended up with 6 offers, but…we did not have a house for her to move to!
The house that we missed out on was in an area that B loved. We began scouring that area, learning about all the different floor plans and home styles. A beautiful home popped up on our search. It was in escrow but had fallen out due to the buyer being unable to get their loan, and he cancelled 10 days before close. Those sellers were devastated, Thanksgiving was fast approaching and we wondered, would they consider our contingent purchase? I called the agent and found out all of the information that I needed for us to put in an offer. I convinced the agent that we had a solid buyer for our house (of the 6 offers we had, 3 looked very promising). All this time I was negotiating the best price for my client’s house that we were selling. Now I had to get that home into escrow and this new one under contract too. Ever heard of the “domino effect” ?Well that was exactly what was happening with these two transactions! Just like with a chain of dominos, if any piece were to topple, the whole thing will come crashing down. I was able to secure the new home under contract with a contingency that spanned the entire duration of escrow! That is to say, should B’s current home NOT close, she is not obligated to close on her new home, with no penalties (financial or otherwise)! Talk about a nerve wracking time!
A HOLIDAY SUCCESS STORY!
Long story short, and with a few bumps in the road, we were able to close on B’s home sale on a Friday and then close on the new home the following Monday! Also, I negotiated a leaseback for her, so that she could renovate the new home to her liking, and in the meantime stay in her first home as a tenant. The best part? We listed the first home for $718,000 and sold it for $770,000, plus the new owner paid her an additional $20,000 for her furniture and decor items! She only has to pack clothes and toothbrushes for her and her mom! That is exactly what she wanted, just in time for the holidays!
If you have a hard time figuring out how to work a strategy such as the one above, call me! I love working on and solving complex issues. In fact, this is just one of the many concurrent sales I have handled in my 15 year Real Estate career. Perhaps you have a less complex situation? I handle those too!
I look forward to hearing from you,
Revi Mendelsohn, Realtor eXp Realty of Beverly Hills, BRE#01461233 Cell: 310-963-7384