Coinciding Settlements Clauses - Funding Issues

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.

Posted by Walt Hess on December 13, 2008 at 12:00 AM

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Walt Hess is affliated with Gem State Realty, Inc., which is located in Twin Falls, ID. For further assistance please use the contact information located on the right.

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Local Information for Twin Falls, ID

Latitude: 42.56142 -- Longitude: -114.463715

ZIP Codes for Twin Falls, Idaho	83301 83302 83303
Area Code for Twin Falls, Idaho	208
Time zone for Twin Falls, Idaho	MST

Other Area Cities: Jerome, ID Twin Falls, ID

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Twin Falls is the county seat and largest city of Twin Falls County, IdahoGR6. As of the 2000 census Twin Falls population was 34,469 (2003 estimate: 36,742). [1] Twin Falls is the largest city of Idaho's Magic Valley region and the seventh largest in the state. As the largest city in a 100-mile (166-kilometer) radius, Twin Falls serves as a regional commercial center for both south-central Idaho and northeastern Nevada. Twin Falls is the principal city of the Twin Falls, ID Micropolitan Statistical Area - the state's largest - which officially includes Jerome and Twin Falls Counties. The resort community of Jackpot, Nevada, in Elko County is unofficially considered part of the greater Twin Falls area. -- Source: Wikipedia.com

Idaho 2000 Census Population Profile Map

	Twin Falls	Idaho	United States
Population	34,469	1,293,953	281,421,906
Median age	33.8	33.2	35.3
Median age for Male	32.1	32.2	34
Median age for Female	35.4	34.2	36.5
Households	13,274	469,645	105,480,101
Household population	33,302	1,262,457	273,643,273
Average household size	2.51	2.69	2.59
Families	8,864	335,588	71,787,347
Average family size	3.05	3.17	3.14
Housing units	14,162	527,824	115,904,641
Occupied units	13,274	469,645	105,480,101
Vacant units	888	58,179	10,424,540

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Coinciding Settlements Clauses - Funding Issues

Local Information for Twin Falls, ID

Latitude: 42.56142 -- Longitude: -114.463715

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