This was a question that came up when I shared that we had an offer accepted on a home in NC while still owning our Denver home. There are a few ways to approach buying and selling at the same time. We’ve done it three different times at this point so I’ll share some of what we have done plus other options you may have.
-Submitting a contingent offer. This is when your offer to buy the new home is contingent upon when you sell your current home. So basically, once your current home sells then you can purchase the new home (and the seller accepts your offer on their house which says the purchase of their home is contingent upon your current home being purchased). Prior to COVID, this was very common. That’s what we did in early 2020 before the housing market became totally insane. We submitted a contingent offer on the new home, the sellers accepted, and that following weekend we listed our current home.
This approach basically became obsolete during COVID because there were so many offers on every home, not to mention waving inspections, cash buyers, etc. so really no one would accept a contingent offer. I mean, why would you “risk” the sale of your home upon someone else’s selling if you can avoid it? All that to say, from what I have seen now (in Denver at least), more people are open to accepting continent offers since the market is much more of a buyers market than a sellers market these days.
-See if you can get approved to own both homes simultaneously. So I know this one may sound a little unrealistic, but you may be surprised. This is what we did for our current Denver to Raleigh move. The builder wasn’t accepting contingent offers so we either had to wait until our Denver home sold or figure out a way to to put in a non-contingent offer. When we bought our Denver home, the lender technically only needed my income to approve us, and so given my income and Stephen’s (and the fact that we were buying a home less expensive in Raleigh than our Denver/current one), we were able to get approved to own both at once. The caveat with this was we of course didn’t want to pay two mortgages at the same time but it bought us time to sell our Denver home while still securing the Raleigh home. In this case, we asked for a longer close on the new house (60 days vs. 30) to give us more time to sell our Denver home so there was little chance of our mortgages overlapping. If you’re interested in this option, your lender will let you know if your income qualifies you.
-Sell your current home first. I know this can be less than ideal if you don’t know what house you’re moving into but there are pros to it. One, when you know exactly what you end up selling for, you know exactly what money you have to work with (from whatever equity you gained). So if your home sells for more than you think, then you may feel comfortable purchasing a more expensive home or if it ends up selling for less than maybe you adjust your budget for your next home, etc. If you go this route, you can see if the new buyers will do a longer close (ie. 45 or 60 days vs. a traditional 30) to give you more time to find your next house.
-Bridge loan. A bridge loan is essentially a short term loan that lends you the money to purchase your new house (with a non-contingent offer) prior to selling your current one. This is something you will arrange with the lender you’re working with. For this convenience there is an added/additional cost but in return you’re able to purchase a new home prior to selling your current one. This can be a great option if you find a house you love and want to put an offer in ASAP but you haven’t listed your current house yet.
-Options like Open Door and Orchard. iBuyer services like these are helpful when you need to sell your house asap and/or guarantee the sale of your home. The upside is you don’t have to go through prepping your home for sale, listing it, going through a traditional 30 day close, etc. but the downside is you’re not going to make as much money as if you listed on the open market. So like anything, there are pros and cons and just depends on what works best for you and your situation!
Okay, these are the main options I can think of regarding buying and selling at the same time but if you’ve done another approach, please share below! xx