Coinciding Settlements Clauses - Funding Issues
Below is a MRR and PLR article in category Finance -> subcategory Real Estate.
Coinciding Settlement Clauses: Navigating Funding Challenges
Overview
When selling a home to purchase another, many opt for a "coinciding settlements" clause in their contract for the new property. This serves two main purposes; here, we'll focus on the primary goal: using funds from the sale of the old home to finance the new purchase.
Understanding Coinciding Settlements
A coinciding settlement clause often states that the settlement of the new home depends on the successful sale of the current property. It specifies how long the settlement can be delayed due to issues with the other transaction and outlines the consequences if the first contract falls through. Typically, if the initial contract fails, the second contract may also become void unless there’s an alternative funding source.
Contrary to what the term implies, settlements don't occur simultaneously. They may happen sequentially in the same office or even on different days in different locations. Often, funds are wired directly from the first settlement's agent to the second, ensuring a seamless transaction.
Tips for Sellers
While coinciding settlements generally facilitate smooth fund transfers, complications can arise if the first sale collapses, often due to the buyer's inability to secure a loan. To mitigate this risk, sellers can include provisions in the clause allowing them to verify the buyer’s loan status with the lender. Confirming the buyer's financial readiness is a prudent step ?" don’t hesitate to ensure everything is in order.
Coinciding settlements are prevalent in today’s real estate market. By following these guidelines, you can help ensure a smooth transaction and avoid potential hurdles.
You can find the original non-AI version of this article here: Coinciding Settlements Clauses - Funding Issues.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.