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. Of course, one way to avoid the housing gap problem from the get-go is to buy a home before you sell yours, but the financial and logistical hurdles have traditionally made that tough, if not impossible.
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 options are for temporary housing.
When your home sale officially closes, you may need to move out right away.
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.
The process of selling a house and buying at the same time 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.
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. Common temporary housing options for sellers are:
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, whether it's an apartment or single-family house. Ideally you'll find something that doesn't require signing a year-long lease that you’ll likely want or need to to break.
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.
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.
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.
While buying the new home first can be difficult financially if you need to sell your home to pull your down payment together, Orchard can help you bridge that gap. We help homeowners unlock their equity before they list their home, so they can purchase a new home first. That way, you can move into your new home, then list your old home for sale. Options like Orchard tend to make the overall home selling experience a lot less stressful.
Here are some more answers to your questions about where to live between buying and selling your house.
Yes, renting a home can be a viable option while waiting to sell your current house. It provides flexibility and allows you to maintain stability during the transition period, giving you time to find the right buyer for your property.
When choosing a temporary living arrangement, consider factors such as location, cost, amenities, lease terms, proximity to work or schools, and the flexibility of the arrangement to ensure it aligns with your needs and preferences during this period.
The length of time you should live somewhere before selling depends on various factors, such as personal circumstances, market conditions, and financial considerations. However, you may not want to sell for at least a few years to build equity, offset transaction costs, and avoid taxes. (Here's more on how soon you can sell your house after buying.)
If you need to relocate quickly, consider options such as corporate housing, rental agreements with flexible terms, or working with a real estate agent who specializes in fast-paced transactions to help expedite the process of finding a new home.
Buying a house before selling your current one can be done through several options. You may consider using a bridge loan, a home equity loan or (HELOC) to buy your new home first. You can also try including clauses in the contract for your new home that are contingent upon the sale of your current one. You can also work with a company like Orchard, that helps you do both at the same time, seamlessly.
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