How to sell your house and buy a new one at the same time

When you’re trying to sell your house while buying your next place at the same time, things can get complicated. The process of buying and selling simultaneously can be stressful, particularly if you need the money from the sale of your current home to put toward your new one.

In a perfect world, your next house would be ready and waiting as soon as you turn over the keys to your previous one. But of course, the world is not perfect, and the timing between selling one home and buying the next does not always line up the way you’d like it to. Take heart, though, because a little planning and working with a savvy real estate agent can help make both transactions run more smoothly. It’s a delicate dance, but the steps can be mastered, letting you successfully conclude both deals simultaneously. Here are five key steps to follow, plus handy tips to manage the process.

5 steps for how to sell and buy a house at the same time

1. Assemble a team of pros

Given all the actions required and paperwork involved in selling and buying a home at the same time, a seasoned professional to guide you through the process is crucial. A skilled real estate agent can give you a realistic estimate of home prices in your area and how to price your current home. Using that figure, you can estimate what your net proceeds will look like, so you can apply that money toward the down payment and closing costs of your new home.

“Working with a really experienced Realtor makes a huge difference,” says William Fastow, a broker with TTR Sotheby’s International Realty in Washington, D.C. “There are a lot of moving pieces, so you want to work with someone who has a proven track record in your market and experience across both buying and selling.”

Using the same real estate agent for both your sale and your new purchase can make the entire process go more smoothly. The same is true of real estate attorneys. Some states require you to have an attorney, but even your state does not, it’s smart to have one on your side. Whenever there’s complicated contract language and large sums of money at stake, professional legal advice is invaluable.)

2. Consider your financial position

Ideally, you’d be able to have concurrent closings, selling your home in the morning and closing on your next place that afternoon — or at least within a few days. But what if things don’t go according to plan? You could suddenly find yourself without the necessary funds to close on your new home, or wind up paying two mortgages for an extended period of time. Worst-case scenario, you may be unable to get final approval for a mortgage and potentially lose your next home.

If you don’t have the means to handle two mortgages simultaneously, it’s smart to include a contingency in your real estate contract that gives you an escape route, should the sale of your current home fall through. You may also consider adding a financing contingency, in case your new loan approval hinges on selling your current home. Both are fairly common, and a good agent will be able to help you negotiate and get them written into the purchase and sales agreement you sign with the seller.

It’s also important to keep close tabs on your finances and credit, both before and during the process. Don’t make any moves that could negatively impact your credit score before your home purchase is fully closed.

3. Analyze the market

When trying to buy and sell a home simultaneously, a lot depends on the conditions of your local housing market. Does it favor buyers or sellers?

In a seller’s market, sellers have the upper hand. This has been the case for most of the past few years, in which the housing scene all around the country was characterized by limited inventory and high demand, despite sharply increasing mortgage rates putting a damper on sales activity. Even in a seller’s market, though, you’ll need to make your home as appealing as possible to bring in top dollar. But you can also be a bit more selective about which offers to consider and limit your options to those with fewer contingencies. If the property is priced right and staged well, it will likely sell quickly. So make sure you’re ready to move fast on buying your next place.

On the other hand, when inventory is high and demand is low, that’s a buyer’s market. When buyers are in the driver’s seat, it could take much longer to sell your home. In a buyer’s market, you may want to hold off on making an offer on your next place until you’ve gone into contract with a solid buyer for your current home. You may also want to include a contingency that voids the deal if the sale of your current home doesn’t go through, for peace of mind.

4. Negotiate the timeline, not just the money

Of course you want to get the best possible price on the sale of your home, and not to overpay for the next one. But consider the timing of the closing process as well when negotiating both deals. The closing date can be one of the most important details when negotiating a sale. The goal is to get both the buyer of your current home and the seller of your next home to agree to adjacent closings and/or any necessary contingencies. You can even look into arranging back-to-back escrow, in which the proceeds from the sale go immediately toward the purchase of the new property, with no waiting.

“When I put out an offer for a client, I’m making it clear that we need to close on that date,” says Mark Pires, a Realtor with Berkshire Hathaway HomeServices in New Canaan, Connecticut. “In a competitive market, the buyer may have to move their schedule around if they really want that home.”

5. Have a backup plan

No matter how carefully you plan your transactions, surprises can occur. Things might not happen on schedule — or might even fall through completely. If you have the right contingencies in your contract, you should be able to reschedule the closings accordingly or walk away with minimal financial pain. But it’s smart to have a backup plan just in case. Here are some safety-net options:

• If you sell your current home but haven’t found your next place yet, you’ll need to find a short-term rental. Be sure to factor in the added expense of moving, or renting a storage unit if all your belongings won’t fit into the temporary place.
• Consider asking your buyers to do a rent-back agreement, which would allow you to remain in your current home after closing for a short time and pay rent to the new owners until you can move.
• If you close on your new place without selling the old one first, you’ll have two mortgages to pay. To cover the costs until you’re able to sell, you may want to consider a home equity line of credit or a bridge loan over the short-term. (If you do use a bridge loan, keep in mind that you’ll be responsible for making payments on it regardless of whether or when your house sells.)
• If you’ve closed on the new dream house, move in and try renting out your old home. The rental income can help offset the expense of the new place until you can sell it.

Should I sell my house now or wait?

Deciding whether it’s the right time to sell your home can be perplexing. According to Fannie Mae’s December 2023 Home Purchase Sentiment Index, 57 percent of consumers still believe that, despite the fluctuating market conditions, now is a good time to sell.

There are a number of important factors to consider when it comes to the timing of your house sale. These include:

• Interest rates: Low interest rates entice more prospective buyers to enter the market, which is advantageous for sellers, while high rates mean fewer buyers who can afford to make the purchase. While rates are down from their peak of 8 percent in the fall of 2023, they’re still relatively high.
• Housing inventory: The country is in the throes of a housing shortage, and has been for some time. A lack of available inventory typically drives up demand and prices for the few available homes.
• Home size: Moving into a smaller home is usually a more budget-friendly choice. So if you’re an empty nester who’s looking to downsize, for example, that will likely be more manageable than upgrading.
• Life circumstances: Sometimes, life happens and you need to sell regardless of whether it’s a good time or not — for a new job, a family situation or some other unavoidable circumstance.

Consider these factors carefully, and don’t rush into a sale just because the market conditions seem right.  If you don’t have a solid game plan for where you’ll go after your home is sold, or if you fear you could be hit hard by a possible recession, then it may be smarter to hold off for now.

Home-selling alternatives

A traditional, agent-assisted listing is not the only way to sell your house. Alternatives, such as cash-homebuying companies, can be especially good if you need to sell quickly or need cash fast. There are national operations that are often a string of franchisees, like We Buy Houses, and smaller local homebuying firms in just about every market. There are also a number of trade-in realty companies that will allow you to keep your current home while you find a new one, such as Knock, Orchard and Flyhomes.  If any iBuying companies operate in your area, like Opendoor or Offerpad, they are worth looking into as well.

If you want to take this route, shop around and get a few quotes (there’s typically no obligation) before you commit to a particular company. Be aware, also, that you won’t typically receive top dollar for your home when you sell via one of these services. Property-buying firms need to make a profit, and they usually offer you less than you’d be able to make in a traditional sale. If you’re really in a rush, taking that financial knock might make sense. But if not, a bit of patience will generally get you a better price.

FAQs

• Can I sell my home if I still have a mortgage?

  Yes — in fact, it’s very common. When you sell a home with a mortgage, you can use the proceeds from the sale to pay off your mortgage balance and any closing costs. As long as you sell your home for more than the outstanding balance, you will be able to clear your debt.
  

• How much does it cost to sell a house?

  Selling a house isn’t all profit — there are prep and closing costs to consider, as well as real estate commissions. Those opting for a traditional, agent-assisted sale should plan for 5 to 6 percent of the purchase price to go to Realtor fees, which are typically paid by the seller. And don’t forget to budget for closing expenses such as attorney fees, transfer taxes, prorated property taxes and more. These can vary widely based on sale price and location.