Coinciding Settlements Clauses - Funding Issues
By Raynor James, Fri Dec 9th

People who are selling their home in order to buy anotherfrequently put a "coinciding settlements" clause into theircontract offer on the new home. The purpose of this is usuallytwofold. In this article, we discuss the first purpose which isto use funds from the old home to pay for the new one.

How Coinciding Settlements Work

A coinciding settlement clause usually says something along thelines of "settlement under this contract is contingent upon thesettlement



of the contract for the sale of the Purchaser'sproperty located at 1234 Spring Valley Drive..." It typicallygoes on to state the maximum number of days this settlement canbe delayed by delays on the other settlement. It also usuallysays what will happen if the other contract becomes void.(Usually "this" contracts becomes void, too, but that doesn'thave to be the case if there's another source of funds.)

The settlements don't literally happen at the same time as thename implies. They can be back-to-back in the same office. Theycan be a day (or even days) apart in offices in differentstates. Very often it's necessary for the settlement agent forthe first settlement to wire transfer funds directly to thebanking account of the settlement agent for the secondsettlement. This is usually a smooth, seamless procedure.

A Word to the Wise Seller

Coinciding settlements usually work well for the purpose ofproviding funds as outlined above. The one problem that crops upfrom time to time occurs when the first sale falls apart forsome reason. The most frequent reason the first sale falls apart(when it does) is that the buyer is unable to get his loan.Because of this, some sellers insist that coinciding settlementclauses include language giving them permission to check withthe lender for the first buyer. Making sure the first buyer isqualified for the necessary loan is good business. Don't feelawkward about it.

Coinciding settlement is a common fact in the current realestate market. Use the above technique to avoid problems withyour real estate transactions.

About the author:Raynor James is with http://www.fsboamerica.org - providing FSBOhomes For Sale By Owner. Visit our "sell my home" page athttp://www.fsboamerica.org/seller.cfm to list and sell your homefor free for one month. Visithttp://www.fsboamerica.org/buyer.cfm to see homes for sale byowner.

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