Risks in Settlement Date for New Construction

[mitchjav]

So, we've purchased new construction in a 55+ Community and we've made it through the design phase and are now in the build phase. Builder is telling us that our original expected close date of mid-May will likely push-out to mid-June. They won't/can't give us any more certainty until 45 days prior to expected closing.

We are getting our current house ready for sale and trying to best manage risk of either having no place to go because our new house is not ready when we need to close on the current house OR having two houses on our hands for too long.

We are currently targeting an end-June close/move-out. Question is should we push it out a month - or longer?

Advantages of sticking to the end-June close/move-out are:

* Take-advantage of what's currently a "hot" market
* Pretty much guarantee that we aren't holding two houses for very long (if
at all)
* Certainty on selling price and costs comes sooner

Advantages of pushing-it out a Month

* Don't need to find temporary housing, should date on new home slip into
July (aside from the cost, which looks like it would be higher between rental
and storage of our stuff vs. our current carrying expenses, it saves the
hassle).

Thoughts?

 

[Ready]

You may find a buyer who is willing to be flexible on the closing date to accommodate you. I would just put the house up for sale when you think the timing is right and then see how things go. If a buyer really wants your house they may work with you.

But I’ve worked with enough builders to know that whatever date they give you, it will be late. And usually their second and third estimate will be late too.

 

[levindb]

The closing on your current home is negotiable. If you get a quick offer, try to push that closing date so that you are not living out of your car.

 

[Aerides]

But I’ve worked with enough builders to know that whatever date they give you, it will be late. And usually their second and third estimate will be late too.

This.

I would say sell it for the price you think is awesome, and then let the chips fall. If the builder is already pushing the date, it will push again, so trying to match things up probably won't work. IE, you'll negotiate with a buyer for June and by the time you get there it will be September. Are you close enough to visit the site regularly? The new house will look almost ready and it will still be 60 days away from closing.

Find a short term rental and storage as back up plans, sell to the highest bidder (who might show up a week after you list and want to close in 30 days), and then be ready to get on with things. Or, if renting/storing is something you absolutely want to avoid, you have to wait to list until you are really in that 45 day window, when the new home looks really ready and the date is firm.

 

[Mark1]

If folks really want the house sometimes they will work with you. We sold our last house to our neighbor's BIL. They wanted the house bad and said we could just stay free until we were ready to leave town 1.5 months later. We instead put into the closing contract to rent it back at fair market value. After the 1.5 month time period, the rent was to go up slightly above fair market value to show we were leaving.