The Daisy Chain

June 9, 2009 | By Kelley Koehler | Filed Under Home Buying 

pretty door and wreath on a tucson homeI was working with a home buyer last month who needed to sell their home in another state before purchasing here.  Luckily, their home back East was already under contract and scheduled to close soon.

Except the buyer of my client’s home back East had to sell *their* home in California in order to buy the Eastern home.  And luckily, they were already under contract with a buyer on that California home.

I call this the daisy chain.  A pretty name for what can be an ugly situation.  If the California buyer is delayed, then the Eastern buyer is delayed, which delays my client.  One thing goes wrong up the line and we have issues.  One thing goes wrong up the line – that we have absolutely no control over – and we have issues.

So if the California buyer needs to extend two weeks in order to finish loan processing, then the Eastern buyer is delayed at least 2 weeks because they need those proceeds in order to close on the Eastern house.  Which puts my client back about 3 weeks before funds arrive from the sale of the Eastern house in order to purchase one here.

You know what can happen in 3 weeks?  The good houses at the great prices are selling.  So we lose out on some really nice properties because someone in California can’t get their act together.

Don’t get me wrong, me and my client have options.  And sometimes, this scenario isn’t avoidable, given other goals.  We’ve discussed the various risk scenarios so that my client can make the best decisions possible.  But if we didn’t have to deal with a daisy chain, we’d be in a much stronger, more flexible position. 

Comments

One Response to “The Daisy Chain”

  1. Jim Little on June 9th, 2009 2:51 pm

    As an agent in Sun City, it would be interesting to see how you protect yourself and your client when involved in a daisy chain.
    We don’t see this often, but the world is changing.

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