Buying While Selling Your Current Home

One of the most common real estate challenges: you need to sell your current home to buy your next one. Here's how to navigate the timing.

The Core Problem

You need proceeds from your current home for the down payment on the new one. But:

• You don't want to sell and end up homeless
• You don't want to buy and end up with two mortgages
• Timing two transactions perfectly is difficult

Your Options

Option 1: Sell First, Then Buy

Sell your current home before making offers on a new one.

Pros:

• Know exactly how much you have for down payment
• No pressure to align two closings
• Stronger offer position (not contingent on sale)
• No risk of two mortgages

Cons:

• Need interim housing (rent, stay with family)
• Two moves instead of one
• Moving twice with belongings

Best for: Risk-averse buyers, competitive markets where contingent offers are rejected.

Option 2: Buy First, Then Sell

Purchase your new home before listing your current one.

Pros:

• Move once, directly into new home
• Can prepare current home for sale while vacant
• No pressure to find a home quickly

Cons:

• Need to qualify for two mortgages
• Carrying costs if current home doesn't sell quickly
• More financial risk
• May need bridge financing

Best for: Buyers with strong finances, slower markets, or ability to handle two payments.

Option 3: Simultaneous Closings

Coordinate both transactions to close on the same day or within days.

Pros:

• Move once
• Proceeds transfer directly to new purchase
• Minimizes interim housing needs

Cons:

• Complex coordination
• If one deal falls through, both are affected
• Stressful logistics
• Requires cooperative parties on both sides

Best for: Experienced buyers with good agents who can coordinate, moderate markets.

Option 4: Contingent Offer

Make an offer on a new home contingent on selling your current home.

Pros:

• Don't have to sell first
• Protection if current home doesn't sell
• Can start shopping while listing

Cons:

• Weaker offer—sellers often reject contingent offers
• May lose out to non-contingent buyers
• Creates uncertainty for everyone

Best for: Buyer's markets where sellers have fewer options.

Bridge Financing Options

Bridge Loans

Short-term loans that bridge the gap between buying and selling:

• Use equity in current home for new down payment
• Repaid when current home sells
• Higher interest rates
• Additional costs and fees

Home Equity Line of Credit (HELOC)

If you have significant equity:

• Draw on HELOC for down payment
• Repay when home sells
• Need to have this in place before listing

80-10-10 Loans

Structure new purchase with smaller down payment:

• 80% first mortgage
• 10% second mortgage
• 10% down payment
• Refinance after current home sells

Making It Work

Communication Is Key

Everyone needs to know the situation:

• Your listing agent
• Your buyer's agent (may be the same)
• Your lender
• The other parties in both transactions

Timeline Planning

Work backward from your target moving date:

• How long will your home take to sell?
• How long to find a new home?
• What closing periods are typical?
• Where are the dependencies?

Rent-Back Agreements

If you sell before finding your new home:

• Negotiate to rent your old home back from the buyer
• Gives you time to close on new home
• Buyer must agree (may want to move in immediately)
• Typically limited to 30-60 days

Flexible Closing Dates

Build flexibility into your contracts:

• Closing windows rather than fixed dates
• Extensions if needed
• Clear communication about timing needs

Financial Preparation

Before starting:

1. Know your equity: What will you net from the sale?
2. Get pre-approved: Understand your buying power
3. Have reserves: Cash for unexpected gaps or delays
4. Understand carrying costs: What if you have two payments temporarily?

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Need to buy and sell simultaneously? Contact Greg Franklin or call (559) 816-7780 to discuss strategy for your situation.