Coinciding Settlements Clauses - Funding Issues


Visitors: 323

People who are selling their home in order to buy another frequently put a “coinciding settlements” clause into their contract offer on the new home. The purpose of this is usually twofold. In this article, we discuss the first purpose which is to use funds from the old home to pay for the new one.

How Coinciding Settlements Work

A coinciding settlement clause usually says something along the lines of “settlement under this contract is contingent upon the settlement of the contract for the sale of the Purchaser’s property located at 1234 Spring Valley Drive…” It typically goes on to state the maximum number of days this settlement can be delayed by delays on the other settlement. It also usually says what will happen if the other contract becomes void. (Usually “this” contracts becomes void, too, but that doesn’t have to be the case if there’s another source of funds. )

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

A Word to the Wise Seller

Coinciding settlements usually work well for the purpose of providing funds as outlined above. The one problem that crops up from time to time occurs when the first sale falls apart for some 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 settlement clauses include language giving them permission to check with the lender for the first buyer. Making sure the first buyer is qualified for the necessary loan is good business. Don’t feel awkward about it.

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

Raynor James is with - providing FSBO homes for sale by owner. Visit our “sell my home" page at to list and sell your home for free for one month. Visit to see homes for sale by owner.


Article Source:

Rate this Article: 
Escalation Clauses - A Home Buyer's Secret Weapon
Rated 4 / 5
based on 5 votes

Related Articles:

Coinciding Settlements Clauses - Moving Issues

by: Raynor James (September 24, 2005) 
(Real Estate)

Fire Department Funding The 4 Upcoming Critical Financial Issues That Will Rock .

by: John R. Hill (July 08, 2008) 
(Finance/Leases Leasing)

Alternate Funding Grants Are Not the End of the Line When it Comes to Funding ..

by: Edward Birmingham III (June 20, 2008) 
(Business/Venture Capital)

Equity Funding Ideal Funding For Your Business

by: Simon Murray (July 09, 2008) 
(Business/Venture Capital)

Viatical Settlements, Or Life Insurance Settlements

by: Donald Lusan (November 29, 2005) 

Debt Settlements - How Credit Card Debt Settlements Are Expected to Stay ..

by: Matt Couch (November 30, 2009) 
(Finance/Debt Management)

Offer To Purchase - Clauses You Need

by: Steven Gillman (September 14, 2006) 
(Real Estate)

Why It's Important to Have Arbitration Clauses in Contracts

by: Quinn Barker (August 12, 2011) 

Liquidated Damages & Arbitration/ Mediation Clauses

by: Willard Michlin (August 01, 2005) 
(Real Estate/Real Estate Consultant)

Escalation Clauses - A Home Buyer's Secret Weapon

by: Raynor James (August 28, 2005) 
(Real Estate)