How to Buy a House When You Need to Sell Yours First

I have been asked this question many times, "I want to buy a home, but I need to sell mine first, how can I do that?" If you're thinking that sounds a bit challenging, it can be, but it doesn't have to be. It's best to learn your options and build realistic expectations. As a realtor I see that each transaction has its own set of unique challenges, so regardless of the terms or circumstances it's going to take some work.

Let's discuss your first option. Once you find a home you really like, you can make a purchase offer contingent on the sale of your property. This means that if the offer gets accepted, you will need to list your home for sale (if you have not already), agree on terms with a buyer and close escrow on it. The process of making the initial offer and taking possession of your new home can take 2-3 months if all goes well. The challenge of this approach is that many selling their home want to close escrow quickly, and so they are more likely to accept an offer without such a heavy contingency. It is, however, still possible. In a hot market it's important to have everything together and be ready to execute and minimize delays. Padding other terms of the offer in the seller's favor can also help.

Here's another option, sell your home first. Don't worry, you won't be homeless, and you don't have to move twice either. This is how it can be done... make the rent-back option a term of the sale. Rent-back is when the buyer closes escrow but the seller remains in the home and pays monthly rent to the buyer. No matter what condition the home is in, this is an option. I have seen sellers do rent-backs in excellent condition homes as well as homes in need of many repairs. As long as you stay active in looking for a home and let your real estate agent advise you so you can make a competitive offer to buy your new home, it won't take too long. In ideal conditions the rent-back option can take 1.5-3 months. Not bad, and you only have to move once!

Thanks for reading, and feel free to ask me any questions or suggest another topic!

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