How Can I Buy a Home Before Selling My Current One?

You found the home you want, but the problem is, your current one hasn’t sold yet. It’s a situation that comes up all the time, and the fear of carrying two mortgages or ending up with nowhere to go keeps many homeowners from moving forward when they should.

In today’s market, with inventory still relatively low in Riverside and surrounding areas, finding the right home can take time, so when the right one shows up, you don’t always have the luxury of waiting for your current sale to close first.

The reality is that a large percentage of homeowners are buying and selling at the same time right now. It takes planning and the right strategy, but it’s absolutely doable. Here are five ways to make it work.

1. Use a sale contingency to protect yourself. This is the most straightforward approach. You make an offer on the new home, but it’s contingent on your current home selling first. It keeps you from carrying two mortgages, which is the biggest concern for most people.

The tradeoff is that contingent offers can be harder for sellers to accept in a competitive market. One way to strengthen a contingent offer is to structure a longer or delayed closing, which gives you time to secure a buyer on your end while locking in the next home.

2. Bridge the gap with a bridge loan or asset-based lending. If you want to make a stronger, non-contingent offer, a bridge loan lets you tap into the equity in your current home before it sells. You’re essentially using the value you’ve already built to fund the next purchase while the sale catches up.

If you also have investment accounts, a securities-backed line of credit is another option. It lets you borrow against your portfolio without selling your investments, which can be a smart way to avoid disrupting a long-term strategy to cover a short-term gap.

3. Tap into assets you already have. A HELOC allows you to borrow against your home’s equity to cover the down payment on the next property. In some cases, a short-term loan from your 401(k) can help bridge the transition, too. With a 401(k) loan, you’re borrowing from yourself and paying the interest back into your own account, so the cost of borrowing stays within your own retirement plan.

These aren’t the right fit for everyone, but for homeowners who have built up equity or retirement savings, they can provide the flexibility to move without waiting.

4. Look into buy-before-you-sell programs. Companies like Orchard, Knock, and Flyhomes are built specifically for this situation. Some of them will actually front the funds for your new home while helping you sell your current one on the back end. They’re not the right fit for every scenario, but when the timing is tight and the numbers work, they can take a lot of the stress out of the process.

5. Sell first, but stay with a rent-back agreement. This one flips the order. You sell your current home first, but negotiate a rent-back arrangement that lets you stay in it temporarily as a renter. It gives you access to your equity right away and takes the pressure off the buying side, because now you’re shopping as a non-contingent buyer with funds in hand.

For sellers in Riverside who want the strongest possible position when they go to buy, this is one of the cleanest ways to make it happen.

The right strategy depends on your situation. Every homeowner’s timeline, equity position, and comfort level is different, and what works well for one family might not be the best fit for another.

If you’re thinking about making a move in Riverside or the surrounding areas and want to map out the best approach, reach out, and let’s put a plan together. Call me at 951-662-1576, email me at james.cottrell@exprealty.com, or visit blog.jamesforhomes.com to learn more.