When we bought our current house in 2007, we had a contingent offer based on financing and home inspection. In Ontario, these conditions are usually for no more than 7-10 days. Failing to waive the conditions kills the deal. Once the deal is firm, your ability to back out is limited to fraud, failure to disclose a grow-op, etc.
Knowing we were going to buy a house, we were already decluttering (fun with a toddler in the house), cleaning (fun with a toddler in the house), and staging with nicer furniture and glass vases (fun with a toddler in the house!). We sold our house within a week and had a bridge loan for about a week between closing on the new house and the old house.
The only cash that changed hands was the initial deposit we gave the vendor of our new house with the offer. On closing of the new house, the bank advanced the complete purchase price less the deposit. On closing of the old house, the bank took the proceeds from our lawyer, paid off the old mortgage, set up the new mortgage.
I will admit that I spent the 10 days between buying and selling with a knot in my stomach!
As an aside, in Toronto the idea of a chain simply does not exist. The market is hot, houses usually sell with multiple offers, and conditional offers are not considered. Even “standard” conditions like inspection & mortgage will put you on the bottom of the pile unless the financial side of things is much higher.
If you are the cautious type, you sell before you buy and realize that you may be in a rental/in-laws/etc for a period time.
It’s always tricky, but real estate agents and mortgage companies can help get it done. The big problem is usually getting the seller of the new house you want to be patient. It’s a serious problem if you end up owning two houses, you’ll be stuck taking any offer you can get to sell the old one. It’s no fun not owning any house either, renting a place for just a few months isn’t all that easy or economical either. However, an awful lot of these deals happen all the time, I’ve been through it and I know a lot of people who have, and I can only remember one case where it was a problem, they managed to rent their old house out for 6 months while they found a new buyer. But that was in ye olde pre-housing bubble bursting days when it was a lot easier to get mortgages and get through something like that.
As I recall, we tried to make the buying contingent on sale of our condo, but the housing market was hot in the area we were buying so we had to remove the contingency in order to keep the deal. Fortunately, the market was also hot where we were selling, so we weren’t too worried. I think the condo was on the market for about 4 days before we accepted an offer.
It was a cross-country move, so we moved out and the closing on our condo happened while we were traveling. I think the closing on our house was a day or so later. It really all depends on the schedules and constraints of the owners on both sides. It was definitely stressful, and from what I have heard from others there is pretty much always some glitch but it usually works out OK in the end.
If you can’t find a buyer who is willing to take an offer from you that is contingent on the successful sale of your house, or if you don’t find a house you like right away, I wanted to get back to you on your earlier question on corporate housing taking cats: the answer is yes. You can find corporate suites, or extended stay hotels, that will take cats (dogs even). We looked into that option recently. We decided to just stay with my folks for awhile instead, but it’s definitely out there.
I’ve done it, and on a move from NJ to California, which made it double tricky. The secret is that you can schedule closings into the future, especially if the buyer is also in a house. That way you can close on your new house just after you close on the old, and sometimes you can work out a deal to move in not exactly at closing. The people who owned the house we lived in now had already moved out, and they were happy to get rent up to the time we officially closed.
The trick is the market. One of the reasons house sales in the Bay Area are down is that inventory is so low that you can’t be sure of finding a house, and so you don’t want to put your house on the market and get stuck. If you can find a few possibilities you’ll probably be safe.
When we moved our old house was so popular that we refused contingency contracts. Which was good, but don’t let that give you over-confidence. Practically speaking you can never force someone to buy your house. Our buyers, who were having problems with the buyer of their old house, started getting antsy, and we only forced them to go through by telling them to perform or else we’d resell through one of the real estate agents lined up to get it. (We sold in two hours - we were famous in our town.)
It shows that it pays to be on good terms with seller and buyer.
We bought our house in NJ from someone we knew who was having one built by a builder whose logo should have been a snail. What we did there, since we were on a month to month lease, was close and have him stay in the house and pay us enough for the mortgage payment and then, after a certain number of months, a penalty. It was not rent since that would get us into a landlord tenant relationship which would not be good. It worked out fine, but he was probably more nervous than us.
Here in the San Francisco area, any sort of sale contingency would be a non starter; no buyer would even look at your offer if you had that in there. Hell, inspection contingencies have to be waived the vast majority of the time.
So, we sold our place and moved into a rental. And, then because the market is insane and we couldn’t find anything we wanted and could afford in an an entire year, we moved again into another rental. We finally found a place to buy more than two years after selling our house.