By Living Room Realty, April 25, 2021
Is your lease ending soon and you promised yourself you’d buy a house at the end?
What do you need to know before you buy?
Play the video for answers.
Nicholas and Dill converse about preparing for current home-buying conditionals and layout a path of least frustration for home-buying this Summer.
Transcript:
Dill Ward 0:02
Hi, this is Dill Ward, and Nicholas. And today, we just wanted to do a quick information session to help you plan your next great move with intention. So today we’re talking about timing your home purchase with the end of your lease.
Nicholas Nascimento 0:18
Yeah, and, you know, I think the critical, the critical thing that we’re looking forward to here is just dissecting what you can do and how you can be prepared and what you need to know, before you go out looking at houses this this early summer.
Dill Ward 0:34
Yeah, it’s time to start planning your year because this process, if you’re planning to buy a house right now, it is many steps, many, many steps, and you need to kind of get ahead of it, especially if you have a lease ending. And this is the you know, I guess, let’s just jump right into tip number one. Tip number one is, if you have a lease, and it’s ending, it’s time to pull it out of the digital or paper archives, and dust it off and read it, there is a section in your lease called termination. And it basically describes what is expected of you at the end of that lease and what’s expected of the landlord. And, you know, sometimes you remember, it was one date, but you pull out the paper, it’s another date. So this is the time to check in on that. Because obviously, that’s the whole point.
Nicholas Nascimento 1:18
And also, it kind of comes with some sticky parts, because you’re probably going to read through and say, Hey, wait a second, I have a pet deposit. And you know, whatever. We’re not going to think about those particulars. Right now, we just want to talk about when your lease ends, and what’s expected of you when you leave your house. So the first tip is that 30 to 45 days, after you’ve bought and owned a house, there’s a chance of rent back. Can we talk about this more Dill?
Dill Ward 1:50
Yeah, so So what Nicholas was basically saying that once you put a contract on the property, you make an offer to a seller, this part of the transaction is called going into escrow. And this takes anywhere from 30 to 45 days if you are getting a loan on that home purchase. And so this is already, you know, if let’s just take scenario why don’t we run a scenario, so let’s say your lease was up at the end of July, then, and let’s say end of July is, you know, the 30th, you know that it’s going to take 30 to 45 days from the time you make the offer on a property to close it. So let’s, that would mean you would really, if you had no overlap between your lease and your new home, you need to be in contract by the beginning of July rough. Probably more likely the last week of June.
Nicholas Nascimento 2:42
Wow. Yeah. So so by July how many contracts… how many offers Do you think a person has to write before they get into a contract by July?
Dill Ward 2:50
O h, man, I don’t even want to get started on that. But you know, yeah, this this, this brings up the next kind of like timeline going backwards is how long is the shopping gonna take? How much time do you have to dedicate to going to look at houses making offers, getting all your hopes and dreams up and then needing a day or two to recover from breaking up with a house and moving on to another one, right? So the shopping period could be, you know, we have had clients come in the door tells exactly what they want, we take them out, find it and lock and load, they get their first house, that’s not always the case. So give yourself a grace period, maybe 30, 60, 90 days of shopping and then really say okay, this is it, we’re gonna make this timeline.
Nicholas Nascimento 3:35
Okay. And then um when they are contemplating this, like the big question, I think is what can they do right now to make sure that they have a smoother transition on the other side? … Like, should they talk to their landlord or…
Dill Ward 3:50
Oh, yeah, great point. So when Nichols is like saying if the time is the time that you’ve set for again, this is a plan we’re just trying to help you formulate a loose plan. Life doesn’t go according to plan. So you have to be fluid and dynamic in your adjusting. And maybe you did want to be out by the end of your lease, but it doesn’t look like it’s just coming together for you. Don’t despair. This is a time to just reach out to your landlord or your property management company and start discussing your plans so that they can also you know prepare for your departure
Nicholas Nascimento 4:26
yeah but a hold up what if my lease actually doesn’t end in the summer but I want to buy a house this summer.
Dill Ward 4:31
I say: just go for it. No no, I mean, this you know, this process takes a while so if you you know want to buy this year, I really think getting yourself informed learning the market, getting a sense of of watch what’s changing because by the time you read the news about the real estate market, it’s already old. Like by the time there is data to report on the market may have already changed. So you want to be connected with a good realtor and you know, keep Your eye on what’s going on. The third piece of this, I really want to make sure people understand because it’s probably not that known about right now. But most people who are living in their property and selling are often very intimidated by where are they going to go right. So they may not have found their house yet. Or maybe they’re contingent on the money from the transaction of the sale to buy another house. If that is the case, there is a high probability that they will be asking the potential purchaser to give them what we call post occupancy. And that means that they’re giving up possession beyond when you’ve bought and close on the property. And that what you commonly hear is called rent back. So basically, you are renting the property to the sellers, after you have already given them all the money and closed on it. And that period of time is anywhere from five days to 60 days. Now, if you are getting a loan, the maximum that you can offer to a seller on rent back is 60 days. So something to consider because that adds another two months onto your process. If you happen to stumble upon a dream home that someone else is deeply living in and not wanting to move right away.
Nicholas Nascimento 6:19
So if you can find a vacant property that you can get in contract, you are golden and you won’t need to worry about this rent-back period stuff. But if it looks like somebody lives in it and honestly it’s gonna be probable there’s there’s a lot of people who are living in their homes trying to sell them right now and you’re gonna have to keep this in mind as a possibility. Because buying a home as you may find out is tricky in this market.
Dill Ward 6:42
Okay, so best thing to do print out a calendar and literally write this out like pick some dates for yourself part of visioning The future is looking at the actual calendar and seeing when you would like to make moves and get actively searching. And if this is all too confusing for you, please just call us and let us do it for you.
