Current House/New House - What should we do?

[ReadingMama]

We're building a house that is nearly completed.  It will be ready in about a week.  We listed our current house for sale in September and had a contract to sell it within 2 weeks.  The buyer agreed to a closing date of December 31st to give us time for our new house to be completed and for us to get our new mortgage (rural development loan process through the government takes 3-6 months). 

We found out today that we'll get the final answer on our new mortgage within the next couple of weeks--but rural development is out of funding as of last week.  So even with an approval, we have to wait for the program to be refunded.  It can take a week or a month--there is no guarantee. 

The buyer is getting antsy and wants to move in early.  Her realtor is telling ours that she's saying, "I'll just buy a different house that I move into now."  (Annoying since it's only another month until we have to close!) 

If she backs out and our loan comes in, we won't be able to afford two mortgages.  We built on contingency that we could sell our house and secure financing by the time the new house was completed.  If we don't have a buyer, we lose out on the new house once the loan comes in.  We'll get our earnest money back, but either have to put our house back on the market and look for a new house, or stay where we are.

If we agree to close early and move into a rental until the loan comes through, we'll have to move twice.  And pay a hefty pet deposit ($600) wherever we go because we have two dogs.  Plus, there's always the possibility that we might not get approved for the loan.  We were pre-certified, but that's not an official approval.

Our realtor is afraid that with Christmas coming up, the buyer might charge up her credit cards and have trouble qualifying for her mortgage.  Apparently the bank pulls the credit reports the day before closing.

[thriftyqueen]

I think if it were me, I would close on the current house and get a rental, if need be.  Do you have family you could live with for a while?  I wouldn't want to risk having 2 mortgages.  That would be extremely stressful.  I don't understand why the person thinks she should close early when a closing has been set for the 31st of December.  I guess if you close and get a rental and the other house falls through, you wouldn't have a contingency of selling your house to buy another.  This would be helpful. 

Sorry you are having to go through this.  It has got to be so stressful.

[lookatreestar]

could you board the dogs with a family member so you don't have to pay a deposit?

[Denvergirlie]

move now into a rental, move everything from house into PODS, live with absolute minimum you can, think extended vacation when packing for the rental. Even staying in an extended stay hotel or other like furnshed rental for a month would be way better than moving twice. When you close on new house, have the PODS delivered.

Find a solution for the dogs, family, friend, or professional boarder if that's cheaper than paying a deposit.

best

[just_lily]

What a yucky situation. 

I guess I don't understand how your buyer could just walk away at this point.  I am in Canada, and once you have a firm offer in place you can't just back out - you are obligated to go through with the contract.  I am sure it happens from time to time, but it would be a big hassle and you would have to pay the seller for their inconvenience. 

So I take it that you are under the same deal for you new house?  You can back out any time?

Have you explored any other sources of financing? 

I think I would be more concerned with getting stuck with two mortgages than with living in a rental for a while.  I would do what needs to be done to get your current place closed and find somewhere temporary to live.  I definitely agree with the PODS suggestion.  The pet deposit sounds steep, but that is a deposit, right?  Not a fee?  So if you take care of the place and don't let your dogs cause damage you would get it back when it is time to move again. 

Moving twice is definitely going to be a PITA, but it is temporary.  Getting stuck with two mortgages when you can't afford it can be financially devastating and it could take years to crawl out of that hole.  This is a situation that I am all too familiar with.

[ReadingMama]

Thank you all for your advice.  We don't have anywhere for the dogs to go (other than being boarded at the vet), but if we close on our house, we'll have the money to pay the deposit.  Don't know why I didn't think of that before. 

The PODS idea is an awesome one.  That'd be great to not have to move all the boxes and furniture twice.  I wonder if there are furnished apartments, or if there are reasonable hotels that allow pets.  New info:  according to the lady who's working with us at the new house, the funding for the rural development program doesn't take longer than a month to get in.  There's a chance that it could take longer, but in her experience, it's usually less than a month until the program is refunded.

Should we just offer to close early instead of waiting for her to back out or should we wait it out in case that was just a tactic of her realtor to get us to close earlier?  Should we offer the fridge? 

[mattemma04]

I would follow whatever is in the contract so the buyer can not back out.If that means closing before your new home closes then I would stay in a weekly rental hotel.Any friends or relatives willing to host you? With the market the way it is I would be worried to lose a buyer(if they are pre-approved).

Can't move things into the new home you are building? Are you pre-approved? You would think they would let you in before closing.

Hope it all works out!

[limette]

Originally Posted by just_lily 

What a yucky situation. 

I guess I don't understand how your buyer could just walk away at this point.  I am in Canada, and once you have a firm offer in place you can't just back out - you are obligated to go through with the contract.  I am sure it happens from time to time, but it would be a big hassle and you would have to pay the seller for their inconvenience. 

So I take it that you are under the same deal for you new house?  You can back out any time?

Have you explored any other sources of financing? 

I think I would be more concerned with getting stuck with two mortgages than with living in a rental for a while.  I would do what needs to be done to get your current place closed and find somewhere temporary to live.  I definitely agree with the PODS suggestion.  The pet deposit sounds steep, but that is a deposit, right?  Not a fee?  So if you take care of the place and don't let your dogs cause damage you would get it back when it is time to move again. 

Moving twice is definitely going to be a PITA, but it is temporary.  Getting stuck with two mortgages when you can't afford it can be financially devastating and it could take years to crawl out of that hole.  This is a situation that I am all too familiar with.

I'm in Canada and went through three buyers (all who signed a contract) who all fell through for various crazy reasons (none having to do with the house).  According to my lawyer (confirmed by two others) and my two real estate agents, buyers can back out at any time with no repercussions other than losing their good faith deposit.  They can back out the day before closing and completely screw you over.  On the other hand it's almost impossible for the seller to break the contract.  

That's OT though and my advice would be close quickly and get a rental.

[texmati]

Originally Posted by limette 

Originally Posted by just_lily 

What a yucky situation. 

I guess I don't understand how your buyer could just walk away at this point.  I am in Canada, and once you have a firm offer in place you can't just back out - you are obligated to go through with the contract.  I am sure it happens from time to time, but it would be a big hassle and you would have to pay the seller for their inconvenience. 

So I take it that you are under the same deal for you new house?  You can back out any time?

Have you explored any other sources of financing? 

I think I would be more concerned with getting stuck with two mortgages than with living in a rental for a while.  I would do what needs to be done to get your current place closed and find somewhere temporary to live.  I definitely agree with the PODS suggestion.  The pet deposit sounds steep, but that is a deposit, right?  Not a fee?  So if you take care of the place and don't let your dogs cause damage you would get it back when it is time to move again. 

Moving twice is definitely going to be a PITA, but it is temporary.  Getting stuck with two mortgages when you can't afford it can be financially devastating and it could take years to crawl out of that hole.  This is a situation that I am all too familiar with.

I'm in Canada and went through three buyers (all who signed a contract) who all fell through for various crazy reasons (none having to do with the house).  According to my lawyer (confirmed by two others) and my two real estate agents, buyers can back out at any time with no repercussions other than losing their good faith deposit.  They can back out the day before closing and completely screw you over.  On the other hand it's almost impossible for the seller to break the contract.  

That's OT though and my advice would be close quickly and get a rental.

I"m in the US, and we have the same deal. We could back out any time, but loose our earnest money. It really is a buyers market, and I would close early and get my money out!

[ReadingMama]

Yes, the buyer can back out at any time.  If she did, she's forfeit her earnest money.  She only put $500 down for earnest money, and our realtor says that's not much to keep her from walking away.  Our realtor is worried because the buyer is young (and so is her realtor) and in her experience, younger people are riskier as buyers when there's a long time between contract for sale and closing.   

[Lucy Alden]

In this market I'd close early.  In fact, I'd make a ton of accommodations I wouldn't have made a few years ago.  Definitely check into an extended stay place or even a vacation rental by owner (vrbo.com).  Better to live in temporary housing than loose out on a buyer and your new home.

[amma_mama]

I also vote for closing early and getting a rental. If you are pretty confident that you will only be "homeless" for one month, I would a short-term furnished rental if they are available in your area, and pack most of your belongings into a Pod or storage unit. Given the market, I would not risk losing the contract as you do not know how long it would take to get another offer.

[Irishmommy]

Can you borrow/buy a cheap trailer and put it on the new property?

[ReadingMama]

We're going to close 2 weeks early and rent an apartment or condo.  Our apartment option will cost about $775 a month with a $600 pet deposit ($250 refundable).  We'd have to move our furniture there, but there's a microwave and washer and dryer there.  The condo is fully furnished and costs $1200 a month with a $1200 security deposit (refundable) and a $400 pet deposit (not refundable.)  We could put everything we don't need for the next month or two in a POD and only have to move our stuff once.  A third option is an extended-stay hotel.  It's pretty expensive too ($1300 a month), but there's no deposits other than $150 total for bringing our dogs. 

Apartment-least expensive option, more work to move our furniture twice, 2 month lease

Condo-expensive, but less work/most convenience, two month lease

Hotel-expensive and less space, but less work and no deposits, no lease to sign either 

So which option?

[texmati]

Originally Posted by ReadingMama 

We're going to close 2 weeks early and rent an apartment or condo.  Our apartment option will cost about $775 a month with a $600 pet deposit ($250 refundable).  We'd have to move our furniture there, but there's a microwave and washer and dryer there.  The condo is fully furnished and costs $1200 a month with a $1200 security deposit (refundable) and a $400 pet deposit (not refundable.)  We could put everything we don't need for the next month or two in a POD and only have to move our stuff once.  A third option is an extended-stay hotel.  It's pretty expensive too ($1300 a month), but there's no deposits other than $150 total for bringing our dogs. 

Apartment-least expensive option, more work to move our furniture twice, 2 month lease

Condo-expensive, but less work/most convenience, two month lease

Hotel-expensive and less space, but less work and no deposits, no lease to sign either 

So which option?

how long do you realistically expect to be between homes? 2-3 mos? The hotel sure is tempting, but I'd probalby get the apt since it sound like the house you are moving into may not be a sure thing. I'd feel differently about a hotel if I knew for sure my move in date.

[thriftyqueen]

I think I would choose the extended stay hotel.  No deposit, no moving any furniture in, you can move out at any time when your house is ready.  I am assuming since it is extended stay that there is a kitchen area.  If so, you would have all that available to you so you would literally only need to bring your clothes and personal items that you want there.  Everything else could go in PODS.  For me, this option would be the least stress. 

[ReadingMama]

We're leaning toward the hotel and PODS too.  It's the more expensive option, but less stress really needs to be the priority now.  Thanks for the input, ladies.

Just got a call today that we have 8 days until closing (and I haven't packed yet!)  AND also found out today that buyer's insurance company won't insure our roof, so that needs to be replaced too.  This week. 

[Lucy Alden]

We sold a house, moved to a temporary location and then bought a house.  I WISH we had done the PODS.  Anything that reduces stress while moving with little ones is totally worth it.

Roof wise, I'm sure there are a ton of roofers that would love to get some work right before Christmas.  The holidays can be very slow for construction because most people put things off until after the holidays.  I'm sure you'll find someone will to put one on this week!

[ReadingMama]

Update:

We got the roof replaced, packed, loaded everything into PODS, and moved into an extended stay hotel in the span of 4 days.  And because when it rains, it pours, we woke up two days before move out to no heat, so we had to get the furnace worked on too. I'm worn out.  Still no word on when we can move into our new house, so we'll be spending Christmas in the hotel.  We can't afford to do this for more than a month, so if it comes to that, I guess we'll have to find a different house/different loan.  We asked if we could rent the house we're building until the funding for the loan came through, but they wouldn't do it.  The PODS made things so much easier.  They're expensive, but I'm glad we did it.    

Thanks for helping me decide! 

[Lucy Alden]

Love your new location (back at the hotel).  Hope everything wraps up in under 4 weeks.  Just think about next Christmas when you'll be completely moved in to your new home and all this will be a funny memory!