For decades there have been no easy answers for homeowners who are trying to buy a new house while selling their old one. They've had to balance tradeoffs between selling before they buy, buying before they sell, or somehow doing both at the same time, which requires coordinating closing dates.
However, the rise in real estate tech companies, including power buyers, have provided a few solutions to help homeowner-buyers overcome this hurdle.
If you’re wondering how to buy and sell houses at the same time, we’ve broken down your options and the pros and cons of each.
The traditional way to sell your home and buy a new one is to do just that, in that order. Homeowners start by finding a real estate agent to list their home, and once it sells, they work with a buying agent to go house hunting for their next one.
It’s a straightforward process with an intuitive flow. Since you’ve sold your house first, that means you have the proceeds on hand when the time comes to put an offer on the next house.
However, the time between move-out date and move-in dates can be long and unpredictable — and the costs of temporary housing and moving expenses can add up, sometimes taking a considerable chunk out of the sellers’ proceeds.
Looking to sell your home? Orchard can help. We'll even recommend improvements to help sell your home for top-dollar. Start here.
Buying before you sell can solve the issue of not having a place to live if you sell first.
In this case, the homeowner works with an agent to find their next house, put in an offer, and secure it. Many people make their offer on the new home contingent on the sale of their old one to help line up their moving timelines. Once they close on their new home, they’ll work with an agent to list and sell their former home.
However, to buy a new house before selling your old one, you’ll need the resources. Here are a few of the factors you’ll need to consider:
Ideally you'd be able to sell your house and buy a new one on a seamless timeline. Imagine that you listed your home the same day you started your home search. You accepted an offer on your house, and your offer on your dream home was accepted within hours of each other. Closing lined up perfectly — your home sale closed the day before your home purchase did — allowing you to use all of the proceeds towards your new house. And the best part? Your closing dates fell aligned, so you only had to move once.
In this scenario, you didn’t need to worry about finding temporary housing and storage, securing additional financing, or shouldering two (or more) mortgage payments at once. You were able to focus on the things that mattered, like saying goodbye to your former home and settling into your new one.
Unfortunately, selling and buying a house simultaneously is extremely difficult — there are too many obstacles (contingencies, negotiations, and lender hold-ups) that can hinder two real estate transactions from lining up perfectly.
If you need to buy and sell at the same time, there are a few ways to make it work for you. You can try to extend the closing date to make sure you have extra time to find a buyer for the old home or find your new home.
If you’re unable to find a new place in time though, you might consider a rent-back agreement. Negotiate with whoever buys the old house to allow you to continue living there for a set amount of time.
If you are having trouble with your home sale, you can always rent out your old house to recoup expenses, or sell to an investor or a company that buys houses for cash. Keep in mind that when you sell to an investor, you may not get as much as you would if you sold your home on the market.
Another way is to work with Orchard. We can help you line up closing dates to sell and buy at the same time, integrating these transactions into one seamless process.
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You can own multiple homes simultaneously so long as you have the means to afford them. For most people, it can be difficult to buy another house or second property when they already own one and haven’t yet paid off the mortgage.
Qualifying for a mortgage before selling your home can be difficult, since lenders will look to hold you to the same financial requirements when you took out the first mortgage, and you may have a higher debt-to-income ratio. You can try taking out a HELOC or home equity loan to close on the new home, or work with a company like Orchard. We’ll give you an interest free loan to cover the costs of your new home while we sell the old one.
Whether you should sell your old home first or not depends on your financial situation and personal circumstances. Selling before buying can pose a great inconvenience, but it may be necessary if they aren’t able to buy first, or coordinate closing dates, or work with a power buyer that services your area.
Here are more answers about buying and selling houses at the same time.
Yes, it can be challenging to buy and sell a house simultaneously. It requires careful planning, coordination, and an understanding of the housing market to ensure a smooth and successful transaction. Working with an iBuyer or a power buyer like Orchard can help simplify the process.
Timing is crucial when buying and selling a house at the same time. Ideally, you should aim to sell your current home and purchase a new one around the same time to avoid being without a place to live or owning two homes at once. You can work with a real estate agent who can help you coordinate the timing and ensure that everything goes smoothly. Learn how long it takes to buy a house
One way to put an offer on a new house before selling yours is to include a contingency clause in your offer. This contingency states that your offer is contingent on the sale of your current home. You can also consider getting a bridge loan, which is a short-term loan that can help cover the down payment and closing costs for your new home while you sell your current home.
Yes, you can use the equity in your current home to purchase a new one. Equity is the difference between the market value of your home and the outstanding balance on your mortgage. You can use a home equity loan, a home equity line of credit (HELOC), or a cash-out refinance to access your home equity and use it as a down payment on a new home. However, it's important to understand the risks and benefits of these options and consult with a financial advisor before making any decisions.
When you list with Orchard, we’ll get your home show-ready and make repairs to increase your home’s value at no upfront cost.
Orchard guarantees your home will sell, so you can buy your next one worry-free.
We provide peace of mind that your home will sell, plus list your home on the market to maximize your earnings.
Use our home sale calculator to estimate your net proceeds.
Our Home Advisors are experienced local agents who know how to sell for top dollar and help win your dream home.
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