Can you buy before you sell?

Navigating the current real estate market as a buyer who needs to sell their home first can be challenging but very manageable with the right strategy and a knowledgeable broker. Today’s market offers several advantages for buyers: inventory is up, homes are sitting longer, and sellers are more willing to negotiate. Mortgage rates have decreased and are expected to remain stable, providing an opportune moment to buy. Moreover, sellers are more flexible, which means buyers can explore homes slightly above their budget and negotiate on price—especially when represented by a strong broker who understands the neighborhood dynamics.

However, one of the most significant challenges buyers face is when they need to sell their home before purchasing a new one. Here are three strategies to handle this scenario effectively:

1. Sell Contingent on Finding a New Home

This is a commonly used strategy where you list your current home and accept an offer contingent on finding a home to purchase. Once your home is in escrow, you’ll be in a stronger position to make an offer on a new property. Many sellers will not consider contingent offers unless the buyer’s home is already in escrow, so this is an ideal approach. It minimizes the risk of losing out on your dream home while providing you with the necessary time to sell your current property.

2. Bridge Loan Option

A bridge loan allows you to borrow against the equity in your current home to fund the down payment on your new home before your current home sells. After closing on the new property, you sell your existing home and use the proceeds to pay off the bridge loan and potentially reduce the loan balance on your newly purchased home. This option provides more flexibility and eliminates the need for contingency clauses, which can be off-putting to sellers.

3. Sell and Rent Temporarily

Selling your current home and renting for a short period can also be a smart move. This allows you to move quickly when the right home becomes available without the pressure of selling your existing home. You’ll be in a strong position to make a non-contingent offer, which is often more appealing to sellers in competitive markets.

In conclusion, with the right strategy, there are multiple options for successfully navigating the process of selling a home before purchasing. Each approach depends on your personal circumstances, but working with an experienced broker who can guide you through the nuances of the market is key to achieving your goals.