What happens if the buyer you have lined up for your present home backs out at the last minute? Suddenly you are expected at a closing table with, say, $50,000 as a down payment on a $350,000 condo. Where's the money? You don't have it. The people from whom you are buying your new house can sue you for nonperformance - not going through with the closing. Sidestep this trap with a subject-to clause. In your contract to purchase the new house, write a clause making the contract subject-to the sale of your present home.

There is another way around this stumbling block. If the sellers do not need cash right away, arrange to show them the equity position that you have in the house you are selling. Then give them a note without borrowing a bridge loan from a bank. That note is actually a second mortgage on your present house, giving them a $50,000 interest in it, in lieu of your borrowing fresh money. Once the sale of your present house finally goes through, you can present these sellers with their $50,000, plus some dollars in interest, and they give you back the note, marked "paid." This is done quite often. Cover yourself, rather than cover up. Put these situations on the table. Do not keep secrets from your broker, buyer or seller. Everyone will sleep better and have more confidence in you.

Perhaps the most anxiety-producing situation occurs when sellers put their San Diego, CA homes on the market, and then find the perfect house that they want to purchase right away. Where do you get the money for the down payment on the new house, since you were counting on the proceeds of the sale on the current home?

This is where your mortgage broker or banker comes in. The broker or banker has your down payment in the form of an equity loan or bridge loan that will cover the down payment. Both these loans use owners equity in their present San Diego, CA homes as security. All you have to do is show your banker documentation on the market value of your home. You will be able to sign a note on the mortgage on your present home. A provision in it says the note will be paid from the proceeds of the sale of your old house. Your interest rate on a short-term loan such as this will be higher.