Selling and buying at once – tips to working with a hubbard clause! Whether moving up or downsizing, at some point in their lives most people are faced with the prospect of having to sell one home, while buying another. This prospect can be specifically challenging when a new mortgage is conditional on the sale of the old home, and when folks want to avoid moving twice, leading to an inevitable hubbard clause.
A hubbard clause is contingency in a purchase contract that makes the buyer’s offer subject to ability to sell and close on another home or property.
Advantages of a hubbard clause:
- Buyer has the flexibility to coordinate their sale and purchase easily
- Buyer has the security of being able to terminate the purchase contract without penalty should their existing home sale fail
Disadvantages of a hubbard clause:
- Limited buyer negotiation power with the addition of this major contingency
- Limited pool of available homes as some sellers are simply unwilling to accommodate a hubbard clause
While it is always to the buyers advantage to not have to use a hubbard clause, sometimes it is simply unavoidable.
TIPS TO GET THE MOST OUT A PURCHASE/SALE SITUATION WHERE YOU MUST ASK FOR A HUBBARD CLAUSE:
- Get your mortgage process started early. This way you will have a head start on the process, be well aware of your closing costs and have a strong pre-approval to be able to present yourself as a highly qualified buyer.
- Have realistic expectations of what the proceeds of your home sale will be. Your Realtor will be able to advise you here. Prepare your home thoroughly for market and price aggressively to ensure your home will sell within a reasonable time frame. It has been my experience that a home that shows well and is priced right will almost always sell within the first 2-4 weeks on market.
- Get your home on market and start shopping! If you must sell to buy – your offer has the best odds of being accepted AFTER your existing home is already under contract. No one wants to take their home off the market to wait for yours to sell. Know your housing options ahead of time so once you accept a contract on your old home, you will be able to very quickly write an offer on a home of your choosing. This will set you up for the highest odds of closing on both homes simultaneously and avoiding two moves….however….
- Have a back up plan! In a perfect world these two closings happen on the same day and a moving truck just brings your stuff across town to the new home….but things don’t always turn out perfectly. You will want to have a plan in place should the stars not align perfectly for this day and you need a place to stay in an unexpected transitional time.
Coordinating two sales at once requires strategy and great timing! You will definitely want to take care to select the right real estate professional to help you with this move!
Last Updated on August 17, 2018 by Minna Reid