How to Buy a House While Selling Your Own: 10 Options to Consider

First: Do your research

Before you begin choosing the best way to buy a house while selling your own, talk to a real estate agent who can break down all of your options.

Your agent can give you a sense of what your house could list for right now and how fast it’s likely to sell. They’ll also get a gauge for your timeline and build a step-by-step process that makes the most sense for you.

Factors agents consider as they walk you through the first few steps

• Your current financial situation: The biggest challenge you’ll likely face is coming up with a down payment for your new home while your equity and investment are still tied up in your current house. Your agent will ask how much you have available to put down if you were to buy a home today. They’ll also introduce you to options, such as a bridge loan or home equity line of credit, to assist in your sale if needed.
• The condition of the house you own: This will factor into how fast your home will sell in the current market and if you might encounter any issues as you list your home.
• Your timeline: Do you have any flexibility around moving and closing dates? Do you have a limited amount of time to complete both sales? These are all questions your agent will consider. There will likely be some overlap between sales, so preparing an easy-to-follow timeline will make things a bit less stressful.
• Equity of your current house: This ties back to your current financial situation, but it will give your agent more information to help you decide if you should sell first or buy. If you sell your home first, your equity can assist in a down payment for your new property.

Next: Understand the timeline

A real estate transaction can be a complex process by itself. But if you decide to buy and sell at the same time, even more steps are added that can disrupt or delay either sale.

Standard timeline for buying and selling your home, assuming there are no issues or hiccups

• Prepare your home for sale (4 to 6 weeks): Your agent will help you price your listing and assist in staging your home if needed. During this time, take a look at your home’s condition to see if there are any potential issues.
• Shop for a new home (8 weeks): Once you comb through the market and find your ideal home, it’s time to create the perfect offer. Your agent might suggest adding a sales contingency, which states that your purchase is dependent on you selling your current home first. If your offer is accepted, your agent may also recommend a longer closing time, so you’re able to sell your home and use your equity for the down payment if possible.
• List your house for sale
• Accept an offer (6 weeks): The average number of days it takes for a listing to go under contract is 45 days, as of December 2023.
• Get to the closing table (4 to 6 weeks): This is most likely where you will see some overlap between selling and buying your home. As you finalize the sale of your property with a home inspection, appraisal, and all other necessary steps, you will most likely be doing the same for your new home.
• Close on your new home (4 to 8 weeks): The exact timeline for your closing will vary, depending on what contingencies you have and if there are any delays with financing. Ideally, you are hoping to close on your new home at roughly the same time as your current home, so your moving van can go straight from your old home to your new one.

Buying before selling

The first approach to buying while selling is simply purchasing a new house before letting go of your old home.

According to Utah real estate agent Susan Boyer, the most significant advantage here is that it relieves some moving stress. Instead of finding temporary housing or paying for a short-term rental, you can stay in your current home and move at your own pace.

“At that point, you can move in [to your new home], and it allows your agent to market your current home that you were living in more effectively,” says Boyer, who touts 15 years of experience.

The danger, of course, is that you may be responsible for two mortgages and could get stretched or sunk financially if something doesn’t go according to plan. And because you’re waiting to sell your current home, you typically can’t use your equity to pay for the down payment on the new property (at least, not without taking out an additional loan).

But don’t worry. There are reasonable ways to go about this route. Here’s an overview:

Option 1: Buy a new house and cross your fingers

As the housing market warms back up again, sellers are regaining some leverage, but the market remains much softer than in recent years due to higher mortgage rates, making it less likely your home will sell as quickly as it might have when we were in a strong seller’s market. However, each local market is unique, so consult your real estate agent for conditions in your area.

Of course, if you don’t feel confident your existing home will fly off the market, this option can be scary. In many cases, buying a second home is more difficult than buying your first home. If you’re willing to take a calculated risk, however, this might be a good option for you.

Option 2: Buy with a sales contingency

When you buy with a sales contingency, it means that a contingency in your offer states that if your current home doesn’t sell by a certain date, you can back out of the purchase contract without penalties. While this would certainly alleviate some of your stress, sellers don’t typically prefer a sales contingency, as it puts their home sale at risk.

Still, there are situations when a seller might consider a contingent offer. One is when your agent can explain to the seller’s agent that your current home will likely sell quickly. In that case, the seller may take a chance and accept your offer.

Option 3: Buy with a bridge loan

Because many sellers use the money they make from selling their home to finance the purchase of their new house, they can often find themselves in a situation where closing dates don’t align. In that case, the money they need from their current home’s equity isn’t quite available yet. That’s where a bridge loan comes in.

A bridge loan is a relatively high-interest loan — often secured by your current home — that can be used to fund the down payment on your new house and cover expenses if you’re juggling two mortgages. The loan is then repaid after selling your current home, usually within six months.

Homeowners who opt to buy with a bridge loan typically put their current home on the market as soon as they find their new home in hopes of selling quickly and shortening the amount of time their bridge loan is open.

Option 4: Use a home equity loan or line of credit to buy

A home equity loan is a loan in which the borrower uses the equity in their current home as collateral. The loan creates a lien against the borrower’s house — and it also reduces the actual equity the homeowner has in their home.

A home equity line of credit (HELOC) is slightly different. While a HELOC also uses your home as security, you don’t receive your money all at once. Instead, you can draw on your line of credit as needed — similar to a credit card — until you reach your determined limit. HELOCs usually carry lower interest rates, but those rates are variable, increasing and decreasing depending on certain factors.

If you have a lot of equity built up in your current house, especially if you are trading down, buying with a home equity loan or line of credit might be a viable option.

Option 5: Borrow from your investment funds

You can use your 401(k) and other retirement funds to fund your purchase, either through a 401(k) loan or a withdrawal. But it can be a riskier option.

If you withdraw from your retirement account — either a 401(k) or an IRA — before you hit 59 ½ years old, you’ll have to pay a hefty fee. Typically, the IRS will charge a 10% penalty and require you to pay income taxes on your withdrawal.

However, there is an exception for individual retirement accounts (IRA) if you are a “first-time homeowner,” meaning you haven’t owned a property in the past two years. If you qualify, you can withdraw up to $10,000 without penalty. But it’s important to note this only applies to IRA accounts, and a 401(k) withdrawal will still have a penalty if you’re a first-time buyer.

A 401(k) loan, where you borrow from your own retirement account, won’t have a penalty fee or require taxes. But you will have to pay yourself back with interest within a certain amount of time (typically five years). And if you default, it will be considered a withdrawal, and you’ll face those same penalties.

So, while borrowing from your retirement accounts may be a suitable option if you’ve exhausted all other possibilities, it does come with serious risks. Not only do you risk the penalty if you withdraw the money permanently or don’t pay back the loan, but you could also be losing out on significant future investment gains.

Option 6: Consider your alternatives

Do you need to sell your home to buy a new one? If you live in an area where rent is relatively high, and you can make it work financially, perhaps you can arrange to rent your house.

Renting your house as a vacation home, entering into a rent-to-own scenario, or renting your house the traditional way are all options.

However, rental income from your home isn’t the same from the bank’s perspective as if you’d sold the property, especially when the lender considers your debt-to-income ratio.

Selling before buying

If you want to play it safe, you can always sell your home before buying a new one. When you go this route, you don’t have to worry about the challenges of temporarily financing two homes or buying with a contingency, says Boyer. It also gives you some financial flexibility since you can likely use the equity in your current home to fund your purchase.

“You have more buying power because you don’t already have a current mortgage,” Boyer says. “It kind of clears the road for you negotiation-wise on your new home, and oftentimes you have the ability to move more quickly.”

On the flip side, if you sell your home first and cannot find a new house, you may be left stranded. One option, in that case, might be moving into a temporary rental home or bunking up with a relative until you’re able to find a new property, and that may cost you more money down the line.

But, again, don’t fret. You have several options that can make selling before buying an attractive route.

Option 7: Sell and cross your fingers

If you live in an area with a hot buyer’s market, meaning buyers have more power, this could be a good option for you. In this situation, the market will likely help you find the right place, and you won’t have to wait too long to buy a new house after yours sells.

But, as we mentioned already, selling your home before buying a new one is not without danger. If you’re in a seller’s market, you might be left with little inventory to choose from and high prices attached to those homes. You might not find a house you like after yours sells — or, if the market is extremely hot, more competitive offers might beat you out.

Option 8: Stretch out the closing process

You can close on a house in about a month … but you don’t have to. As the seller, you can ask the buyer for a longer closing period, which will give you more time to find a new place to live.

While some buyers won’t agree to an extended closing period, others might find it advantageous as well — especially if they’re moving up and also have a home to sell.

Option 9: Ask for a rent-back clause

If you sell your home and can’t find a new one to buy right away, consider asking for a rent-back clause in the sales contract. In this scenario, you’ll be able to rent your home back from the new owner for a certain period of time after the sale closes — let’s say three months — giving you extra time to search for a new home while keeping a roof over your head.

Option 10: Use HomeLight’s Buy Before You Sell program

In the past, there haven’t been a ton of great options to buy a house before selling your current one. You either had to make a contingent offer, take out an expensive bridge loan, or dip into savings you’re counting on for later in life. However, it’s our mission at HomeLight to remove these obstacles. With our Buy Before You Sell program, you can unlock your equity upfront, avoid a double move, and sell your current house with peace of mind. If you’ve already found a home you love and want to learn more about the program, you can get started by filling out a short questionnaire.

How does HomeLight Buy Before You Sell work?

HomeLight’s Buy Before You Sell program simplifies your transition to a new home. It allows you to purchase your next home before selling your current property.

Here’s how HomeLight Buy Before You Sell works:

1. Apply in minutes with no commitment: Find out if your home is a good fit for the program and get your equity unlock amount approved in 24 hours or less. No cost or commitment is required.

2. Buy your dream home with confidence: Once you’re approved, you’ll have access to a portion of your equity in your current property. You’ll be able to submit a competitive all-cash offer with no home sale contingency at any time — regardless of how long it takes to find your new home.

3. Sell your current home with peace of mind: After you move into your new home, your agent will list your unoccupied house on the market to attract the strongest offer possible. You’ll receive the remainder of your equity (minus the transaction and program fees) after the home sells.

»Get started today at this link: homelight.com/buy-before-you-sell

HomeLight was founded in 2012 and has an accredited A+ rating with the Better Business Bureau. The company has earned a 4.8-star rating on Google from past clients. You can read more customer testimonials at this link.

Yes, You Can Buy Before You Sell. Why Move Twice?

Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.

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Start your home-hunting journey with confidence

As you stand at the threshold of buying a new home while selling your current one, HomeLight’s Buy Before You Sell program can help you step forward with confidence and peace of mind.

The right strategy and support can transform the challenge of buying and selling simultaneously into an opportunity for a smoother and more rewarding transition.

At HomeLight, our commitment is to help make your real estate journey simple, certain, and satisfying. Whether you’re looking to buy before you sell or just want to consult with a top real estate agent in your city, we’re here to help.

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