What’s The Best Way To Buy a Home Before Selling?

By Nick Berard

Nick Berard is a world-class Realtor with a passion for helping clients manage wealth through real estate.

Selling your current home before buying a new one is the conventional way to move. However, depending on your situation, there will be times when buying before you sell is the better option. Whatever your reason, you should know that buying first comes with additional risks, such as paying two mortgages if your current home takes a long time to sell.

If you’re in a situation where you must buy first before selling, don’t worry. It’s not impossible, but it takes some strategic planning to make it happen. Here are four things that will help you buy before you sell:

1. Use a home equity line of credit. A home equity line of credit, or HELOC, is a second mortgage that allows you to borrow cash based on the value of your home. In other words, it allows you to use your equity without selling your home. While lenders vary on how much they’ll let you borrow, 85% of your equity is industry standard.

If you choose this option, you’ll need to act fast. Getting approved for a HELOC often takes longer than a traditional mortgage approval, so you should have it in place before applying for the mortgage on your new home. Once you have moved into your new property, you can put your old one up for sale at your leisure and pay back your HELOC using the profits.

2. Finance with a bridge loan. A bridge loan is a short-term, high-interest loan that lets you use the equity in your current home. Once we find your new home, your lender will help you qualify for it using that equity, allowing you time to sell your old home. The total value you need should be at least 80%.

Using a bridge loan is another way to access that equity, so it’s important to connect with your lender sooner rather than later. This loan lets you qualify for both properties for a short period, making it often quicker than a home equity line since you’re only dealing with one loan. It’s a great option if you’re short on time and have a good income to qualify.

3. Use a service that will help you make a cash offer. Companies like Knock and Homeward are revolutionizing the way people buy and sell homes. These services emerged in the past few years as inventory got low and competition intensified.

HomeLight has been a company I’ve talked to locally. They’ll put together a program where they can actually buy your new house in cash.

Using cash offers allows you to move into your new house, complete repairs on the old one, and get it on the market. They use the profits from the sale of your previous home to pay off the lien they put against it.

While there are costs involved, it’s a convenient option if the timing and costs align and if you don’t have any other alternatives.

4. Ask for help from family or friends. If you have family members or friends who are willing to help you buy the next house before you sell your current one, you can co-buy the next property together. However, I do not recommend this to everyone. When thinking about co-buying a property, it’s best to have an agreement stating when you’ll pay them back, how much the interest will be, and other arrangements.

Ultimately, the best option for you depends on your situation. Buying a new home before selling your existing one has its unique challenges, but if you can leverage the four options above and utilize the guidance of an experienced agent, you can come up with the best solutions for your situation.

If you want more details about this topic or have any real estate concerns, don’t hesitate to call or email me at (360) 770-3245 or nickberard@kw.com. I’d love to hear from you and help you make 2025 your best year yet.