Selling a House and Buying at The Huntingdon: Sequencing the Two Closings

Which closing has to go first?

The documents decide it. Three orders are possible for a house sale and a purchase in this tower, a promulgated Texas Real Estate Commission form stands behind each one, and each form names what it costs to run the move that way.

Sell the house first, and the Seller's Temporary Residential Lease (Form ID 15-6) is how a seller stays on afterwards, for a period the Commission's own description of the form holds to no more than ninety days after closing of the purchase contract. Buy first, and the Addendum for Sale of Other Property by Buyer (Form ID 10-6) is the form that makes the purchase contingent on the buyer's receipt of the proceeds from the sale of a named property; the Commission describes it as the addendum used where the buyers will be unable to buy the new property unless their existing property is sold and closed. Overlap the two, and a bridge loan is the named source of funds, acceptable to Fannie Mae where the conditions in its Selling Guide, B3-4.3-14, Bridge/Swing Loans, are met. A bridge is a source of funds with conditions attached rather than a way round the arithmetic.

The purchase side is the awkward half, because the two transactions run on two forms with two sets of blanks. The house sells on the One to Four Family Residential Contract (Resale) (Form ID 20-19). A home in this tower is bought on the Residential Condominium Contract (Resale) (Form ID 30-17), which the Commission describes as containing unique provisions relating solely to condominium transactions, among them the delivery of the association's declaration, bylaws and rules and of its resale certificate. Two forms, two effective dates, and deadlines counted from both.

What the building is, and what the county record supports about it, sits on this site's building guide. What homes here are asking sits on the market update. What the monthly obligation at this address comes to sits on the maintenance-fees page, and what that monthly buys sits on the page about what the monthly covers.

What does the contract do when the purchase depends on a sale?

Paragraph A of the addendum does the work. The contract is contingent upon the buyer's receipt of the proceeds from the sale of the buyer's property at an address the parties write in, on or before a date they write in as well. Where that contingency is not satisfied or waived by the buyer by that date, the contract terminates automatically and the earnest money is refunded to the buyer. The addendum prints its own notice under that sentence: the date inserted there should be no later than the Closing Date specified in Paragraph 9 of the contract.

Paragraph B is the part most readers have never seen. Where the seller accepts a written offer to sell the property, the seller notifies the buyer of that acceptance and that the seller requires the buyer to waive the contingency. The buyer then has the number of days written into the blank, counted from the seller's notice, in which to waive, and otherwise the contract terminates automatically and the earnest money goes back to the buyer.

Paragraph C gives the only route to a waiver: the buyer notifies the seller of the waiver and deposits a stated sum with the escrow agent as additional earnest money, and all notices and waivers must be in writing and are effective when delivered in accordance with the contract. Paragraph D prices the waiver. A buyer who waives and then fails to close and fund solely due to non-receipt of the proceeds from the property described in Paragraph A is in default, and the seller may exercise the remedies specified in Paragraph 15 of the contract. Paragraph E states that for purposes of the addendum time is of the essence and strict compliance with the times for performance is required.

The purchase side carries clocks of its own, each counted from something. Within three days after the Effective Date the buyer delivers the earnest money and the option fee to the escrow agent. The termination option runs for a number of days after the Effective Date written into the blank, with notice given by five in the afternoon local time where the property is located. Where the buyer has not received the declaration, bylaws and rules, the seller delivers them at the seller's expense within a number of days after the Effective Date and the buyer may terminate within seven days after the buyer receives the Documents. The certificate runs on the same pattern, with a right to terminate within seven days after the buyer receives the Certificate, and it must have been prepared, at the seller's expense, no more than three months before the date it is delivered. Closing is on or before the date written in, or within seven days after objections to matters disclosed in the commitment have been cured, whichever date is later.

The Third Party Financing Addendum (Form ID 40-11) adds two more. Where the buyer cannot obtain Buyer Approval, the buyer may terminate within a number of days after the Effective Date written into the blank, by giving the seller notice of termination and a copy of a written statement from the lender setting forth the reasons for its determination. Where the lender determines that the property does not satisfy its underwriting requirements for the loan, among them appraisal, insurability and lender required repairs, the buyer may terminate on or before the third day before the Closing Date, on the same two pieces of paper. Where the buyer does not terminate under the first of those paragraphs, the contract is no longer subject to the buyer obtaining Buyer Approval, and where the buyer does not terminate under the second, Property Approval is deemed to have been obtained. Approval is deemed obtained when Buyer Approval and Property Approval are obtained, and the addendum states that time is of the essence for that paragraph.

One paragraph can move all of those at once. Where the Documents reveal that the property is subject to a right of refusal under which the association or a member of it may purchase the property, the Effective Date is amended to the date the buyer receives the association's certification that the seller has complied with the requirements under the right of refusal and that all persons who may exercise it have not exercised or have waived the right to buy. Where the buyer does not receive that certification within the days written in after the Effective Date, or the right is exercised, the contract terminates and the earnest money is refunded to the buyer.

What happens if the sale closes first and the purchase is not ready?

The seller stays on as the buyer's tenant, under a lease with a ceiling on it. The notice at the head of the form reads for use only when the seller occupies the property for no more than ninety days after the closing, and the Commission's description of the form says the same thing. The Buyer's Temporary Residential Lease (Form ID 16-7) is the mirror image on the other side of a closing, and the Commission describes it as used only where the buyer will occupy the property for no more than ninety days prior to closing on the purchase contract.

The terms a seller staying on signs are short and specific. The term commences on the date the sale covered by the contract is closed and funded. Rental is stated per day, excluding the day of closing and funding, and the full amount of rental for the term is paid at the time of funding of the sale, with no refund where the lease terminates early due to the tenant's default or voluntary surrender of the property. The landlord refunds any unused portion of the deposit with an itemized list of all deductions within 30 days after the tenant surrenders possession of the property and provides written notice of a forwarding address, and both of those have to happen before that clock starts.

Upkeep moves with possession. Except as the lease otherwise provides, the tenant bears all expense of repairing and maintaining the property, including the yard, trees and shrubs, unless otherwise required by the Texas Property Code, and the tenant promptly repairs damage caused directly or indirectly by any act or omission of the tenant or of anyone other than the landlord, the landlord's agents or invitees. The landlord may enter at reasonable times to inspect, and the tenant provides door keys and access codes for the term. The Property Code's own protections stop short in one place the form names: its requirements relating to security devices do not apply to a residential lease for a term of ninety days or less.

Both contract forms carry the same warning in their possession paragraphs, about a stay nobody wrote down. A possession by the buyer before closing, or by the seller after closing, that is not authorized by a written lease establishes a tenancy at sufferance relationship between the parties.

The next sentence of that paragraph tells the parties to consult their insurance agent prior to change of ownership and possession, because insurance coverage may be limited or terminated, and it adds that the absence of a written lease or appropriate insurance coverage may expose the parties to economic loss. The lease makes the same point in capitals: possession of the property by the seller as tenant may change insurance policy coverage.

One statute speaks to the money sitting between the two closings. Section 41.001 of the Texas Property Code exempts a homestead from seizure for the claims of creditors except for encumbrances properly fixed on homestead property, and it provides that the homestead claimant's proceeds of a sale of a homestead are not subject to seizure for a creditor's claim for six months after the date of sale. That is what the section says; how it meets one set of facts is a lawyer's question.

What it costs to carry two homes at this address while the dates fail to meet is priced on this site's page about buying and selling at the same time here.

How does a lender treat the house you still own?

One sentence in a guide decides whether buying first is possible at all. Where the borrower's current principal residence is pending sale but the transaction will not close with title transfer to the new owner prior to the subject transaction, and the borrower is purchasing a new principal residence, the current housing payment and the proposed housing payment must both be used in qualifying the borrower for the new mortgage loan (Fannie Mae Selling Guide, B3-6-06, Qualifying Impact of Other Real Estate Owned, read September 2026).

The exception to that is documentary rather than discretionary, and it names two items. Fannie Mae will not require the current residence's payment to be used as long as the lender is provided with the executed sales contract for the current residence, and with confirmation that any financing contingencies have been cleared. Both of them, not either one.

A bridge loan is the named alternative, with three conditions attached. It cannot be cross-collateralized against the new property. The lender must document the borrower's ability to successfully carry the payments for the new home, the current home, the bridge loan and other obligations. And Fannie Mae does not have a specified limitation on the term of bridge loans (Fannie Mae Selling Guide, B3-4.3-14, Bridge/Swing Loans, read September 2026).

The bridge then reaches the same file it was taken out to rescue. Where a borrower obtains a bridge loan and uses the funds to close on a new principal residence before the current residence is sold, the payment creates a contingent liability that must be counted as part of the borrower's recurring monthly debt obligations in the ratio. A loan secured by the borrower's own financial assets is the other documented route: the lender need not count that contingent liability where it obtains a copy of the applicable loan instrument showing the borrower's financial asset as collateral, and where the borrower intends to use the same asset to satisfy reserve requirements, the lender reduces the value of the asset by the proceeds of the secured loan and any related fees (Fannie Mae Selling Guide, B3-6-05, Monthly Debt Obligations, read September 2026).

Every one of those is one investor's conditions on a loan rather than law, and a lender applies its own underwriting on top of them, so the answer for a particular file comes from that lender. What a lender looks at in this building itself sits on this site's page about buying here to live in.

What happens to the federal tax on the gain from the house?

The statute sets out one rule with several conditions. Gross income does not include gain from the sale or exchange of property if, during the five-year period ending on the date of the sale or exchange, the property has been owned and used by the taxpayer as the taxpayer's principal residence for periods aggregating two years or more (Section 121 of Title 26 of the United States Code, the 2024 edition).

The amount excluded on any one sale or exchange is capped at $250,000. The $500,000 figure applies on certain joint returns, and only where all three of the statute's conditions are met: either spouse meets the ownership requirements, both spouses meet the use requirements, and neither spouse is ineligible for the benefits of the exclusion by reason of the one-sale paragraph. That paragraph provides that the exclusion does not apply to a sale or exchange where, during the two-year period ending on the date of that sale or exchange, there was any other sale or exchange by the taxpayer to which the exclusion applied.

The agency states the same rule in plainer words: there is an ownership test and a use test, and on a joint return either spouse must meet the ownership test while both spouses must meet the use test individually, measured as 24 months out of the last five years leading up to the date of the sale. The two tests may be met during different two-year periods, and both have to be met during the five-year period ending on the date of the sale (Internal Revenue Service, Topic no. 701, Sale of your home, read September 2026).

A second rule reaches a house that is let after the owner stops living in it. The exclusion does not apply to so much of the gain as is allocated to periods of nonqualified use, allocated on the ratio of the aggregate periods of nonqualified use during ownership to the whole period of ownership. A period of nonqualified use means any period, other than the portion of any period preceding January 1, 2009, during which the property is not used as the principal residence of the taxpayer or the taxpayer's spouse or former spouse. The definition then carries an exception that matters here: the term does not include any portion of the five-year period described in the exclusion which is after the last date that the property is used as the principal residence of the taxpayer or the taxpayer's spouse. Further exceptions sit in the same subparagraph.

A reduced exclusion is opened by three reasons in the statute's own terms. It applies to a sale or exchange where the exclusion would not otherwise apply by reason of a failure to meet the ownership and use requirements, or by reason of the one-sale-in-two-years paragraph, and where the sale or exchange is by reason of a change in place of employment, health, or, to the extent provided in regulations, unforeseen circumstances.

Reporting runs on its own rule. Where an informational income-reporting document such as Form 1099-S is received, the sale of the home is reported even if the gain from the sale is excludable, and the sale is also reported where all of the capital gain cannot be excluded, on Schedule D and Form 8949 when required. The agency points a reader to Publication 523 for the complete eligibility requirements, the limitations on the exclusion amount and the exceptions to the two-year rule.

That is the rule as the statute and the agency state it. Applying it takes ownership dates, use dates, what the taxpayer has sold before and figures that belong to one return, and a reader's own tax adviser is who answers their case.

What happens to the Texas homestead exemption in the middle of a year?

Start with the sentence that stops two homes carrying it at once: a person may not receive an exemption under Section 11.13 for more than one residence homestead in the same year. On the house being sold, the sale itself is the end of it. An exemption once allowed need not be claimed in subsequent years and, except as otherwise provided by Subsection (e), applies to the property until it changes ownership or the person's qualification for the exemption changes. Except as provided by Subsection (r) and subject to Subsection (c-1), the chief appraiser may still require a person allowed one of those exemptions in a prior year to file a new application confirming current qualification, by delivering written notice that a new application is required together with the appropriate form.

The date rule comes next, and it opens with its own list of exceptions. Except as provided by Subsections (b) and (c) and by Sections 11.421, 11.422, 11.434, 11.435 and 11.436, eligibility for and the amount of an exemption for any tax year are determined by a claimant's qualifications on January 1, and a person who does not qualify for an exemption on January 1 of any year may not receive the exemption that year.

One of those exceptions is the whole of this section. A person who acquires property after January 1 of a tax year may receive an exemption authorized by Section 11.13, other than an exemption authorized by Section 11.13(c) or (d), for the applicable portion of that tax year immediately on qualification for the exemption, if the preceding owner did not receive the same exemption for that tax year.

The filing deadlines run from different events. A person required to claim an exemption whose eligibility is determined on January 1 files a completed application form before May 1 and furnishes the information the form requires. A person who after January 1 of a tax year acquires property qualifying for an exemption covered by Section 11.42(d) or (f) applies for the applicable portion of that tax year before the first anniversary of the date the person acquires the property. For good cause shown the chief appraiser may extend the deadline for filing an exemption application by written order for a single period not to exceed 60 days.

One condition can stop an application where an address has not caught up with a move. Except as provided by Subsection (p), a chief appraiser may not allow an applicant an exemption provided by Section 11.13 where the applicant is required to provide a copy of a driver's license or state-issued personal identification certificate unless the address listed on it corresponds to the address of the property for which the exemption is claimed.

Then the limit on the appraised value of a residence homestead, which runs off a qualification date. It takes effect as to a residence homestead on January 1 of the tax year following the first tax year the owner qualifies the property for an exemption under Section 11.13, and it expires on January 1 of the first tax year that neither the owner of the property when the limitation took effect nor that owner's spouse or surviving spouse qualifies for an exemption under Section 11.13. For purposes of that subsection, an owner who receives an exemption as provided by Section 11.42(f) is considered to have qualified the property for the exemption as of January 1 of the tax year following the year of acquisition. So where an owner acquires a home in this building after January 1 and receives the exemption by that route, the first tax year of qualification is the year after the year of acquisition, and the limitation takes effect on January 1 of the tax year following that one.

Both promulgated contract forms reach the subject from the closing side, in the same words. Taxes for the current year, interest, rents and regular periodic maintenance fees, assessments and dues are prorated through the Closing Date; the tax proration may be calculated taking into consideration any change in exemptions that will affect the current year's taxes; and where taxes for the current year vary from the amount prorated at closing, the parties adjust the prorations when tax statements for the current year are available.

What any of this does to a particular account is answered by the appraisal district for the address, and the exemption's own definition sits on this site's page about buying here to live in.

What can this page not tell you?

What a home here costs to hold each month is a per-home figure the association's resale certificate states, and this site publishes it as a table of listed homes rather than as one rate: the maintenance-fees page carries the table, and the page about what the monthly covers carries what that money buys.

Whether this building's declaration or its rules add anything to a transfer sits in the documents the seller furnishes with the certificate. Whether an association will produce that certificate on time is nobody's promise: it has to furnish one within ten days of a written request from the selling owner, and where it does not, Section 82.157 of the Texas Property Code provides a sworn affidavit route, and where the owner has furnished that affidavit, lets the owner and the purchaser agree in writing to waive the requirement to furnish a certificate.

What a particular lender will do with a particular file comes from that lender. The Selling Guide is one investor's conditions on a loan, and a lender adds its own underwriting to them.

A reader's own federal tax position turns on their ownership, their use, what they have sold in the two years before, and figures that belong to their return, which is why their tax adviser answers it. Their exemption position, and the account it sits on, is answered by the appraisal district.

Every day count in these contract documents is a blank the parties fill, which is why each deadline above is given by what it counts from rather than by a number the form leaves open.

When you have a house to sell and a home here to buy, bring both files to Paige Martin and set the two sets of dates against each other.