Whether to sell first or buy first when replacing your home is a separate decision — feel free to consult us on the criteria for choosing. Here, we focus specifically on the practicalities of temporary housing and the delivery grace period that become necessary once you've decided on a sale-first approach.
- With a sale-first approach, you may need temporary housing between settlement and moving into your new home.
- A delivery grace period (hikiwatashi yūyo) is a special agreement with the buyer that lets you keep living in the home for a set period after settlement.
- If a grace period can't be arranged, you'll need to arrange temporary housing through a rental contract.
- Adding temporary housing means moving twice, which tends to add to both cost and effort.
- One advantage is that you can start your new-home search in earnest once your sale proceeds are confirmed.
Preparations Needed Once You've Decided on a Sale-First Approach
If you've chosen a sale-first approach for financial planning reasons, the next thing to consider is how to organize your living arrangements between settlement and moving into your new home. Whether you can negotiate a delivery grace period changes whether you'll need temporary housing at all, so it's worth forming a plan at an early stage.
What Is a Delivery Grace Period?
A delivery grace period is a special agreement that lets the seller keep living in the home for a set period after settlement and the transfer of ownership, with the buyer's consent. It's used as a bridge while you wait for your new home to be delivered or for construction to finish, but whether the buyer agrees to it depends on their own circumstances, so it's not guaranteed.
Points for Negotiating a Delivery Grace Period
If you want a delivery grace period, letting prospective buyers know that through your agent from the listing stage onward makes it easier to reach agreement. It's important to work out, as contract terms agreed in advance, how long the grace period will last and whether you'll pay an amount equivalent to rent during that time. Sharing your intentions early also makes it easier for the buyer to plan around the handover timing, which is the key to a smooth negotiation.
Planning Temporary Housing If a Grace Period Isn't Available
If you can't get a delivery grace period, you'll need to arrange temporary housing, such as a rental property, so you can vacate by the settlement date. Even at a stage when your new home's completion or handover date isn't yet fixed, it's advisable to work backward from the settlement date to plan when to sign for temporary housing. Since rental properties also take a certain number of days for tenant screening and contract procedures, starting your search only once the settlement date is close may leave you with fewer options. Choosing temporary housing that lets you move some of your belongings in ahead of time also makes moving day on settlement itself go more smoothly.
The Cost and Logistics of Moving Twice
If temporary housing is involved, you'll move twice — from your old home to the temporary housing, and from there to your new home. Including options like keeping some belongings in a storage unit in the meantime, arranging your moving company's schedule early so the two moves don't overlap makes it easier to keep both cost and effort down.
Coordinating the Schedule with Your New-Home Search
The advantage of a sale-first approach is that you can proceed with your new-home search once your sale proceeds and remaining loan balance are settled. Assuming you'll get serious about the new-home search during the temporary housing period, we also cover the flow from appraisal through settlement in sell-25.html — worth a look as well. Going into your new-home search with your finances confirmed also gives you the reassurance of being less likely to have to backtrack over budget overruns. If you can't predict how long the temporary housing period will last, choosing a rental contract that allows short-term cancellation makes it easier to stay flexible.
FAQ
Will a delivery grace period always be granted?
Since it requires the buyer's agreement, it isn't guaranteed to be granted. If you have circumstances related to a replacement purchase, it's important to communicate your wishes early in the contract negotiation.
Does a delivery grace period cost anything?
In some cases, the seller agrees to pay the buyer an amount equivalent to rent for the grace period. Whether it's paid or free of charge is decided through contract negotiation.
How long should I expect to need temporary housing?
It varies depending on how your new-home search is going and whether you have a delivery grace period, so there's no single answer. Once your sale's settlement date is set, you'll work out the concrete schedule for your new-home search from there.
Summary
Once you've chosen a sale-first approach, whether you can negotiate a delivery grace period determines whether temporary housing is necessary. Bearing in mind the possibility of moving twice, we recommend estimating your schedule and costs early.