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When you close a sale on a home, it’s definitely cause for celebration. But it’s hard to focus on popping the champagne when you aren’t sure where to live between selling and buying. If you’re about to sell a home and are nervous about where you will reside in that awkward in-between period, let’s break down how long you can stay in your home post-sale, and what your alternative housing options are.
What happens after you sell your home?
When your home sale officially closes, do you need to move out right away? Maybe.
How long you have to move after closing depends on the terms you negotiated with the buyer of your home. Technically, possession of the home passes to the new owners at closing or after the mortgage lender pays out the funds to the buyer. However, sellers (or their real estate agents) can negotiate additional time to stay in their home after the closing.
Negotiating your move-out date to work for your schedule is really helpful, but you need to do this before you sign the contract. Having an idea of what your ideal move out date is before you begin listing your home will make it easier to negotiate an advantageous move out date.
On the flip side, buyers can negotiate the date they want to begin to occupy the property in their purchase and sale contract, so you’ll have to find a date that works for both parties. If your contract doesn’t stipulate a certain move out date, you will need to move out before you finish the closing process — which can be stressful if you haven’t closed on a new home yet.
How can you line up the timing of selling and buying?
The process of selling a house and buying a new one is complex, and the odds of a move between homes lining up perfectly timing-wise are slim. That said, making a compromise with the buyers is the best way to make the process go smoothly if you will have a gap between when you sell your home and buy a new home.
It’s fairly common for buyers to give sellers leeway on when they need to move out. It’s rare for a buyer to expect the seller to actually move out the second the ink is dry on the closing papers. Typically, buyers will grant the sellers a week to 10 days after closing on the property to vacate it completely.
To make the buyers more amenable to this type of flexibility, the sellers need to be flexible too. If the buyer wants to store some of their belongings in the garage while they make their transition, or need to stop by to measure a room before they shop for furniture, you’ll want to agree to that.
What are your living options after you sell your home?
Sometimes a week isn’t enough time to get your housing ducks in a row. If that’s the case, sellers will need to find a temporary, but more long-term, living arrangement. Let’s look at a few temporary housing options for sellers, one of which includes staying put for a while.
One of the most convenient housing options while you wait to move into a new home is to stay exactly where you are. When you sell a home, you can negotiate a rent-back agreement with the buyer that allows you to rent the home from them after closing until an agreed-upon date. This arrangement is a win-win if the buyers need more time to get ready before they move in, or aren’t in a rush to leave their current living situation. Usually, rent-back agreements only last a few months, but this agreement can save you a move if you are able to rent from the buyers until you’re ready to move into your next home.
Not all buyers will agree to a rent-back, but it doesn’t hurt to ask. If you’re in a seller’s market and have multiple buyers ready to make an offer, you can let each of them know that your priority is to sell to someone willing to do a rent-back.
If a rent-back is not an option, you can look for a short-term rental so that you don’t have to stress about signing a year lease on an apartment or rental home that you’ll likely want to break soon.
Renting an off-season vacation home is a great way to find a furnished place to live at a reasonable price. You can search online for short-term rentals that have three or six month leases too. Some short-term rentals even offer month-to-month leases. Vacation rental websites like Airbnb also allow for months-long bookings, and sometimes hosts will offer a discount for a longer stay.
Extended stay hotels
Another option — albeit typically a pricey one — is to book a room or suite at an extended-stay hotel or hotel that offers long-term suites. Usually the bill for these rooms are footed by a company on behalf of their employee, but anyone can pay to book one. That being said, if you do need to relocate for your job, you may be able to negotiate a moving stipend as a part of your offer letter to help cover the costs of temporary housing. Many companies can also get discounted rates at local hotels they frequently book employees at or refer business to, so if you need to foot the bill yourself, see if they can help you get a discount.
Apartments and condos
If you don’t want to pay to store your belongings, you’ll need to find a place to stay that is unfurnished. It can be challenging to find an apartment or condo that will take on a renter on a short-term basis, but it is possible. If you haven’t found a new home to purchase yet, signing a year lease may be the easiest path forward and will give you plenty of time to search for the perfect home.
One way to get your hands on an unfurnished rental that is happy to take on a short-term tenant, is to rent a vacant home that is in the process of being sold. Some sellers will have the opposite problem, where they need to move out as soon as possible., but they haven’t been able to sell their home yet. While they wait for an offer to come in, they may choose to rent their home out for a few months to help cover their mortgage, property taxes, and any other expenses needed to maintain the residence.
One way to avoid the housing gap problem from the get-go is to buy a home before you sell yours. While that can be difficult to manage financially if you need to sell your home to pull your down payment together, Orchard can help you bridge that financing gap. Orchard helps homeowners unlock up to 90% of their equity before they list their home so they can purchase a new home first. That way, you can move into your new home without an awkward housing gap, then list your old home for sale. Options like Orchard tend to make the overall home selling experience a lot less stressful.