Can You Buy a New Home Before Selling Your Current One?

By Frank Valente

Associate Broker at eXp realty of California. Active agent and broker since 2003 in the Sacramento Region. Retired from the Navy in 2002 after 24 years as a Commander. Former Surface Warfare Officer.

Buying a new home before selling the current one might seem tricky, but it is possible with the right plan. It takes a little preparation, but there are several ways to make it work. Whether through contingencies, short-term financing, or creative funding options, there are solutions to fit different situations. Here are four strategies to buy first while ensuring a smooth transition.

1. Make a contingent offer. One approach is to make an offer contingent on selling the current home. This means the purchase of the new home depends on successfully closing the sale of the existing property. Sellers are more likely to accept this type of offer if the home is already listed or, better yet, under contract and close to finalizing the sale. If the home is not yet on the market, it becomes much harder to get an accepted offer.

2. Use a bridge loan. A bridge loan offers short-term financing to buy a new home while still owning the current one. This type of loan provides funds upfront and is repaid once the original home sells. Different lenders offer various bridge loan programs, so exploring the best option is key to making this strategy work.

3. Explore other financing options. For homeowners with significant equity, a home equity line of credit (HELOC) or an equity loan can provide the necessary funds to purchase a new home before selling. Another option is borrowing from a retirement account, such as an IRA or 401(k), with the ability to repay those funds after the home sells. Financial gifts or temporary loans from family members can also be helpful solutions.

4. Rent out the current home. Turning the current home into a rental can create financial flexibility while waiting for the right time to sell. Short-term rentals, even for just a month or two, can be useful in areas where temporary housing is in demand. In some cases, insurance may cover short-term rental costs for displaced individuals, making this an option worth considering.

Buying before selling is possible with the right preparation and a solid plan. Whether using contingencies, financing, or rental options, there are multiple ways to make it work. If you have any questions or need assistance, please reach out. You can call me at +1 (916) 257-0893 or send an email to frank@frankvalente.com. I look forward to hearing from you.