How To Buy a Home Before Selling Yours

Most homebuyers today are also home sellers, meaning they’re juggling two major transactions at once. The biggest dilemma? Whether to buy first or sell first.

Selling first frees up equity to put toward your next home. You might be considering selling soon, given that the best time to sell is quickly approaching.

However, it also means moving twice and keeping your current home show-ready, which can be an exhausting process, especially for families.

The trade-off simply isn’t worth it for some.

A "family I worked with had six kids and two dogs. They homeschooled, and one of the parents worked from home a few days each week. Getting ready for home showings was absolutely not an option for them,” says Rachel Bennett, a broker and owner of Wildwood Realty in Georgetown, TX.

Instead, Bennett worked with the family to purchase their new home before selling their old one.

“They found their perfect new home, with a gorgeous outdoor kitchen and massive backyard in the exact neighborhood they were hoping for. They moved into the new home and enjoyed being close to several of their friends while we listed and sold their old home.”

If that approach sounds appealing and you're wondering how to buy a house before selling, this guide breaks down the risks, financing options, and strategies to make it happen.

Step 1: Understand the risks and benefits

Home sale transactions are complicated, and being on both sides of the table (buying and selling) simultaneously carries enough conditions to make anyone’s head spin. Before diving in, it’s crucial to understand what you’re signing up for to maximize the benefits and minimize your risk.

Pros of buying before selling

• No rush: One of the biggest advantages of buying before selling is the ability to house hunt at your own pace, from the comfort of your home, without the pressure of a looming sale. The lack of pressure can help you find the best option.

• Move once, on your terms: Skip the hassle of moving twice. Instead of living out of boxes and paying double the moving fees, you can transition directly into your new space when it’s convenient for you.

• Avoid temporary housing: Finding short-term housing can be costly and stressful. Buying before selling means you won’t have to deal with the inconvenience of renting or staying with family while searching for your next home.

Cons of buying before selling

• Complex financing: Managing two mortgages at once or securing bridge financing can be challenging, especially if you haven’t navigated it before. You will need to have strong financial stability and meticulous planning.

• Harder to secure financing: Without proceeds from your current home sale, it may be more difficult to qualify for a new mortgage, especially if your debt-to-income ratio is high.

• Risk of home values fluctuating: If the market shifts after you buy, your current home could sell for less than expected, leaving you with financial gaps or unexpected carrying costs.

Step 2: Explore financing options

Unless you’re able to purchase your next home with cash, you’ll need to secure financing. This can be complicated for the reasons outlined above, and because your buying budget will likely depend on the proceeds from your home sale (which hasn’t happened yet). 

There’s no perfect solution, says Nicole Rueth, a mortgage executive at The Rueth Team with Movement Mortgage. “I tell my buyers, every option costs something; either time, stress, or money. They have to choose.”

Home sale contingency

A home sale contingency is an agreement where your offer to buy a new house depends on successfully selling your current home first. If your existing home doesn’t sell by a certain date or price, you can walk away from your offer without penalty.

This reduces your risk but may make your offer less attractive to sellers who prefer a buyer without contingencies, especially in competitive markets.

“I just had a buyer that went out for two weekends and could not get an offer accepted going with his preferred contingent status,” says Rueth. “We restructured his financing to go noncontingent and helped him get under contract on his third weekend out.”

Home equity loan

A home equity loan allows you to borrow against your current home’s equity to secure funds for the down payment on your next home. It can provide a cost-effective solution, as long as you have enough equity and can temporarily handle multiple financial responsibilities.

“Often a home equity loan will be the most affordable solution,” explains Bennett. “Of course, buyers will need to talk with a loan officer to ensure that their debt-to-income ratio would make sense and get them the outcome they are looking for.”

Your debt-to-income (DTI) ratio measures how much of your monthly income goes toward debt payments, like mortgages, loans, and credit cards. A higher DTI can limit your borrowing power and reduce your homebuying budget.

Bridge loan

A bridge loan is a short-term financing option that provides temporary funds (often used as a down payment) by borrowing against the equity in the current home. Once your original home sells, you repay the bridge loan using your home sale proceeds.

This option can be especially valuable in competitive real estate markets because it allows you to buy quickly without waiting for your current home to sell. However, bridge loans typically have higher interest rates and fees compared with traditional mortgages. There's also the risk that your current home takes longer than expected to sell, increasing your costs.

Guaranteed offer and trade-in programs

Guaranteed offer and trade-in programs let you lock in an upfront price for your home, providing certainty and peace of mind as you plan your next move. You’ll know exactly how much money you’ll receive, so you can confidently buy your new home without worrying about market swings or timing headaches. 

However, this convenience often comes at a cost. Guaranteed offers are often less than what you’d get from traditionally listing.

Step 3: Plan a timeline

Once you’ve chosen a financing strategy, it’s time to map out the steps to ensure a smooth transition from your current home to your next one. Timing is key to avoiding financial strain or logistical headaches.

Get preapproved for a mortgage

Before you start house hunting, secure mortgage preapproval. This gives you a clear budget and makes your offers more competitive.

Work with an agent who understands both transactions

A real estate agent experienced in buying and selling simultaneously can help you coordinate both deals, negotiate contingencies, and manage deadlines. Even if your agent isn’t representing you in both transactions, this pro must understand how one transaction can affect the other.

Buy a house and move

Once your offer is accepted, it’s time to start planning your move. Consider negotiating these provisions into your purchase agreement to help smooth the process:

• Rent-back agreement: This allows you to sell your current home but stay in it temporarily, essentially renting it back from the buyer for an agreed-upon period. This gives you time to close on your new home without rushing to move.

• Extended closing period: Instead of the standard 30- to 45-day closing, you can negotiate a longer closing timeline on your new home. This provides extra time to sell your current property before taking ownership of the new one.

List your home as soon as possible

To minimize overlap, put your current home on the market as soon as possible. A well-timed sale can help you avoid carrying two mortgages at once.

Sellers will want to look ahead to the week of April 13–19 as it is the best time to sell, according to a new report by Realtor.com® economists.

Bennett additionally recommends listing before starting your home search if you plan to use a home sale contingency.

“Get your home ready, on the market, and get a contract on it before you start making offers on a new home,” she says.

“This will make your contingent offer much more attractive to a seller, and they’ll be more likely to work with you. It is heartbreaking when you find the perfect home, and the sellers are unwilling to work with your contingency.”

Close

Work closely with your lender, agent, and title company to ensure both transactions align. Having a backup plan for temporary housing or short-term financing can help if unexpected delays arise.

Common mistakes to avoid

Even with careful planning, homeowners can run into challenges when buying and selling at the same time. Here are some common pitfalls to watch out for.

Assuming the best

It’s easy to expect everything to go according to plan, but delays, financing issues, and market fluctuations can happen.

“In a shifting market ... what your home is worth today could be a different number than it will be two months from now,” explains Bennett.

Always have a backup plan in case your home takes longer to sell or your new home purchase faces unexpected hurdles, and don’t be afraid to lean on your agent.

“The market changes every single day, and your trusted real estate agent will be by your side to explain market conditions and what’s going on.”

Not understanding financial burden

Owning two homes at once, even temporarily, can be costly. Be sure you fully understand mortgage payments, carrying costs, and potential risks before committing to a purchase. Run the numbers on different scenarios so you're prepared for any financial overlap.

Waiting too long

Timing is everything. If you wait too long to list your home, you could end up paying two mortgages. If you delay securing financing, you might miss out on your ideal new home. Act proactively to keep both transactions moving forward.