One of the questions I am asked most often is this:
“How can I buy a new home if, in order to pay for it, I first need to receive the money from the sale of my current one?”
About 70% of the transactions I handle involve people who need to sell their home in order to buy another one.
Some want to buy a bigger home because their family has grown, or because they work from home and need more comfortable spaces. Others, on the contrary, find themselves managing a home that has become too big, perhaps because their children no longer live there, and prefer to move into a smaller property, reducing running costs and setting aside part of the money from the sale.
Another very common situation involves people who simply need to change area, perhaps to be closer to work, family or certain services.
Whatever the reason, selling and buying a home at the same time requires very careful planning, because it is not only a matter of coordinating the price of the two transactions, but also the timing of the sale, the purchase, the deeds, the handover of the keys and any move.
Before you even start looking for your new home, you therefore need to know precisely:
the realistic value of the property to be sold, the likely time needed to sell it, the capital that will actually remain available after paying off any mortgages and expenses, the possibility of obtaining new financing, and whether the property’s documentation is in order.
Without this information, you risk committing to the purchase of a new home without yet being certain that you can complete the entire transaction.
So let’s look at the three main options for coordinating the sale with the new purchase.
1. Buy first and sell afterwards
The first option, generally the riskiest, consists of finding a home that meets your needs, signing a purchase offer and paying a deposit, and only then starting to sell your own home.
In this case, first of all, you will need to have the funds required to pay the deposit on the new purchase.
The main problem, however, is timing. If the contract commits you to paying the balance for the new home within three or four months, you will have to sell your home and receive the proceeds by that deadline.
Selling your home would therefore become a genuine emergency.
Besides going through the whole transaction under a great deal of stress, you could find yourself without the money needed to complete the purchase by the agreed deadline.
In that case you could be in breach of contract, with the risk that the seller keeps the confirmatory deposit and enforces the further remedies provided for by the contract and by law.
Alternatively, just to meet the deadline, you might be forced to accept a particularly low offer for your home.
The real risk, therefore, is not only losing the home you wanted to buy, but also being forced to sell the one you already own at a bad price.
This solution can only be recommended when you have sufficient liquidity or when you are certain you can complete the purchase regardless of the sale of your home.
2. Buy on condition that you sell your own home
The second option is similar to the first, but offers greater protection.
You can submit a purchase offer that is conditional on the sale of your current home. In practice, the purchase of the new home only becomes effective if you manage to sell yours within an agreed deadline.
The offer must, however, clearly state what is meant by “the sale of your own home”.
It will need to specify, for example, whether the condition is considered fulfilled upon acceptance of an offer, upon signing a preliminary contract, upon receipt of a deposit of a certain amount, or only at the time of the notarial deed.
The clause should also state:
the deadline by which the sale must take place, the minimum acceptable price, the minimum amount to be received, the documentation needed to prove that the condition has been fulfilled, and what will happen if the sale is not completed by the deadline.
How the sum handed over together with the offer is managed must also be set out precisely.
For example, the sum could remain held in trust by the estate agency until the condition is fulfilled, provided that this arrangement is expressly set out in the contract.
If you do not manage to sell your home within the agreed deadline, the condition will not be fulfilled and, according to the terms of the offer, you will be released from the commitment and the deposited sum will be returned to you.
From the buyer’s point of view, this option is certainly safer.
The problem is that the feasibility of the transaction can be rather low, because the owner of the home you want to buy would have to commit to you without being certain that the deal will go through.
In most cases, the seller will therefore only be willing to accept this condition for a limited period, which could be, for example, twenty, thirty or forty days, depending on the situation.
This means that, if you do not manage to sell your home within the agreed deadline, you will not lose the deposit, but you could lose the property you wanted to buy.
3. Sell first and agree on a longer timeframe for the deed
The third option, which in most cases I consider the most prudent, consists of first putting your home on the market and finding a buyer willing to pay an adequate deposit and to wait a sufficiently long period for the final notarial deed.
You could, for example, agree on completion after six or eight months, but the amount of the deposit and the timeframe must be set according to the individual transaction and the needs of both parties.
This way you will be certain that you have sold your home, you will know the amount you will receive, and you will be able to look for your new home with a real, defined budget.
What’s more, thanks to the deposit received from your buyer, you may have the funds needed to secure the new home.
The main advantage of this solution is that you can approach the new purchase without the urgency of having to sell at any price.
This strategy, too, must be carefully planned. It is not enough to set a distant date for the deed: you also need to understand when the home will actually be handed over and how to coordinate the move from one home to the other.
THE PROBLEM OF HANDING OVER THE KEYS
In the most common case, on the day of the notarial deed the seller receives the balance of the price and hands the keys over to the buyer.
This means that, unless otherwise agreed in the contract, the seller will have to vacate the property, leaving it free of people and belongings, at the very moment of the sale.
However, if the money from the sale is needed to buy the new home, a practical problem may arise.
The seller would have to leave the home, temporarily move their furniture into storage and find temporary accommodation with family, friends, in a hotel or in a rented property.
They would then have to wait until the money from the sale is actually available in their account, complete the deed for the new home and organise a second move.
Besides the stress, this solution also involves a significant cost.
The real risk is therefore having to face two moves and being temporarily left without a home to live in.
Before scheduling the second deed, you also need to check with your bank when the money will actually be available, because timing can vary depending on the payment method used and on banking procedures.
In some situations it is possible to coordinate the sale and the new purchase on the same day or at two very close moments, by involving the notaries, the banks and all the parties concerned in advance.
When this is not possible, there are two contractual tools that can help coordinate the entire transaction: deferred handover of the property sold and early handover of the property purchased.
DEFERRED HANDOVER OF THE PROPERTY SOLD
To avoid being left without a home, it is possible to agree that the property will be handed over a few days after the deed.
The contract may state, for example:
“The property and its keys will be handed over within fifteen days of the signing of the final notarial deed.”
This way, on the day of the deed you will receive payment of the price, but you will be able to continue living in your home for the agreed period.
After checking that the money is actually available in your account, you can proceed with the deed for the new home and use the following days to organise the move.
This allows you to move directly from one home to the other, avoiding temporary accommodation and double moves.
Deferred handover must, however, be accepted by the buyer and precisely set out in the contract.
It is not enough to write, in general terms, that the seller will stay in the property for a few days. It is advisable to specify:
the date and, if possible, the time of the handover, the condition in which the property must be left, liability for any damage, the management of utilities and condominium fees, a possible daily penalty in the event of delay and, where necessary, a sum withheld as a guarantee that the home will be vacated on time.
This strategy is particularly suitable when the new home is already habitable and does not require major work.
EARLY HANDOVER OF THE PROPERTY PURCHASED
If, on the other hand, the new home needs to be renovated, fifteen or twenty days will hardly be enough to complete the work.
In this case, a different solution can be considered: early handover of the property purchased.
Properties in need of renovation are often empty, perhaps because they come from an inheritance or because the owner no longer uses them.
It can therefore be agreed that the future buyer receives the keys after the preliminary contract and before the final deed, so as to start the work.
The process could be as follows: after the preliminary contract is signed, the keys are handed over, the renovation is carried out, the move into the new home is organised and, afterwards, the deed for the home sold is signed and the balance for the new home is paid.
In this way, it is possible to coordinate the sale, the renovation and the new purchase without being left without a home.
Early handover is, however, a very delicate solution and must not be handled through a simple generic clause.
Before the deed, in fact, the seller remains the owner of the property, while the future buyer could start even very significant work on a home that does not yet belong to them.
It is therefore essential to set out:
which works are authorised, who must submit any building permit applications, who will be liable in the event of damage or injury, which insurance policies must be taken out, who will pay utilities and condominium fees, and what will happen to the work carried out if the deed is not signed.
The arrangements for returning the property, any obligation to restore it to its original condition and the necessary financial guarantees must also be set out.
Before handing over the keys early, it is essential to have completed the planning, land registry, mortgage and notarial checks on the property.
Conclusions
When you need to sell and buy a home at the same time, planning is what really makes the difference.
It is not enough to find a new home and hope to sell your own within the necessary timeframe.
You need to know the real value of the home you are selling, check the documentation, establish the available budget, assess whether a mortgage may be needed, and precisely coordinate the dates of the contracts, the deeds, the payments and the handover of the keys.
Deferred handover of the property sold and early handover of the property purchased can be two very useful solutions, but they must be properly negotiated and set out in the contracts, without relying on simple verbal agreements.
Because, when it comes to selling and buying a home at the same time, the real goal is not just to complete both transactions, but to do so without underselling, without being left without a home and without exposing yourself to risks that could have been avoided with proper planning from the outset.