Should I Buy or Sell My House First? (And How Do I Avoid Being Homeless in Between?)
You want to sell your current house and buy another one.
Sounds simple enough.
Until you realize you somehow need to sell the house you're living in, find another house you actually want, get both transactions closed, move all of your belongings, and preferably avoid spending three weeks living in a hotel with your dog and everything you own.
This is usually when people ask me:
"Do I buy first or sell first?"
The answer?
It depends.
I know. Very helpful.
But there are several ways to structure a buy-and-sell situation, and the right strategy depends on your finances, the market, and how much uncertainty you're comfortable with.
Option 1: Sell your current home first.
Financially, this is often the cleanest option.
Once your home sells, you know exactly how much money you're walking away with and how much you have available for your next purchase.
It may also make your next offer stronger because it isn't dependent on selling another property.
The obvious problem?
You still need somewhere to live.
If you haven't found your next home by the time yours closes, you may need temporary housing or another arrangement to bridge the gap.
Not impossible.
Just something we'd rather figure out before you're surrounded by moving boxes.
Option 2: Buy your new home first.
If you financially qualify to purchase your next home without selling your current one first, this can make the moving process much easier.
You can close on the new home, move at your own pace, and then prepare your previous home for sale without trying to keep it perfectly clean for showings while you're still living there.
The downside is obvious.
For some period of time, you own two houses.
And potentially have two mortgage payments.
For some people, that's completely manageable.
For others, absolutely not.
Option 3: Make your purchase contingent on selling your home.
Depending on the market and your circumstances, you may be able to make an offer that's contingent on selling your existing home.
This can solve the financial problem of owning two properties at once.
But there's a tradeoff.
A seller may prefer an offer from a buyer who doesn't have another home to sell first, especially if they're comparing multiple offers.
That doesn't mean contingent offers don't work.
They absolutely can.
We just need to understand how the contingency affects the strength of your offer and structure it accordingly.
Option 4: Sell your home and negotiate time to move.
Another possibility is selling your home but arranging to remain in it for a period of time after closing.
Depending on the contract and what the buyer agrees to, this can give you additional time to close on your next home and move.
It can be a great solution.
It also needs to be negotiated carefully because you're technically occupying a home you no longer own.
There are details involving possession, insurance, deposits, responsibilities, and timing that need to be clearly spelled out.
This isn't the place for a handshake and a "we'll figure it out."
What about bridge loans or other financing options?
There are also financing strategies that may allow you to access equity from your current home or purchase your next home before the first one sells.
Bridge loans, home equity options, and other loan programs may be available depending on your financial situation.
This is where I bring your lender into the conversation early.
Your lender can tell us what's financially possible.
Then I can help determine what makes the most sense from a real estate and negotiation standpoint.
Can we actually coordinate both closings?
Yes.
I've worked with transactions where a seller is simultaneously becoming a buyer, and there can be a lot of moving pieces.
The sale of one home may provide the funds needed to purchase the next.
Closing dates matter.
Possession dates matter.
Loan deadlines matter.
And suddenly everyone's calendar becomes very important.
This is why these transactions need a plan from the beginning.
So which should you do first?
Before deciding, I look at several things with my clients:
How much equity do you have in your current home?
Do you need those proceeds for your next down payment?
Could you qualify while carrying both mortgages?
How quickly is your current home likely to sell?
How competitive is the market where you're buying?
How flexible are you about temporary housing?
How much financial risk are you comfortable taking?
Once we know those answers, the best strategy usually becomes much clearer.
My advice
If you're thinking about buying and selling at the same time, talk to me before you put your house on the market and before you start writing offers.
There are usually more options available when we plan ahead.
Sometimes I'll recommend selling first.
Sometimes buying first makes more sense.
And sometimes we'll structure the two transactions so they happen within days of each other.
My job is to look at the entire picture and help you build a plan that protects your money, gives you the strongest negotiating position possible, and keeps the process manageable.
Because moving once is stressful enough.
Moving twice because nobody planned ahead?
I'd really rather save you from that.
