You’re downsizing, upsizing, or want a much-needed change of scenery. While browsing for a home, you’re awestruck by a beautiful abode. Between the modern upgrades and spacious rooms bathed in natural light, it checks all your boxes. You’re ready to make an offer but there’s a big caveat: You already own a house, and you need the equity from it to afford your dream upgrade. How do you buy a house before you sell yours — and is it possible to make this work? Now that you’ve graduated into repeat buyer status, the equity you’ve built in your current house over time can be a springboard for your next purchase. According to property analytics company CoreLogic, the average U.S. homeowner has racked up a cool $274,000 in equity, up from $182,000 since before the pandemic. That’s a nice chunk of change, but it’s also not always easy to access when you need it. A recent survey from HomeLight found that among repeat buyers, 49% need to use equity from their existing home to buy the new one they want. That equity is taken into account when a lender looks at the amount of funds they’re willing to provide. It can also make putting money down a whole lot easier or even enable you to buy your next place with all-cash. Since you can’t pry open your roof and extract that equity with a crowbar, it can be hard to get the money you need you need it, let alone time everything right. Some people to sell their place first and hope they can find a new house quickly thereafter — but that, too, can feel risky, especially in a market like today where there aren’t many houses for sale. Yes, it’s possible to buy a house without selling yours first, but it can be challenging. The process traditionally requires you to make a contingent offer on your new home, which stipulates that the purchase depends on the sale of your current residence. But this can put you at a disadvantage against other buyers who can make clean offers with less perceived risk for the seller. “I think that contingencies are really tough right now,” says Aleana McMurray, a top real estate agent in Seattle. “If you have a home that is for sale in a less desirable area it may sit for longer, so a seller is less likely to accept a contingent offer, and it’s nearly impossible in a competitive offer situation.” Alternatively, some people use a bridge loan or tap into their savings to buy first. Yet, these options can make anyone nervous and be a strain on your finances. In recent years, a number of creative financing solutions have cropped up to address these obstacles to buying a house before you sell. HomeLight’s Buy Before You Sell program* is one of them — which we’ll explore more in depth here! In the complex process of moving and managing multiple real estate transactions, buying your next home before selling can offer a number of advantages: When you sell a house before you buy a new one, it frees up any equity you’ve gained (after accounting for selling fees) and is likely to boost your buying power. But doing things in this order can also can leave you without a place to live. People typically spend an average of 3 months searching for a home; there’s no guarantee you’ll find something you like right away. Until you do, you’ll have to figure out a temporary place to stay and where to put all your stuff. When you buy a house first, you avoid having to move twice. A one-and-done move can be a godsend for anyone who hates moving (okay, so everyone) and especially parents who know that if you disrupt the kids’ schedules, there will be hell to pay. It takes two to three months to sell a home, and sometimes longer. If you find a house you want to buy but wait to sell yours to make a move— there’s a good chance it’ll be long gone by the time you put in an offer. “Any houses that come on the market that are move-in ready and are up to date with the latest trends are very competitive and are not lasting long at all,” says Jacobe Kendrick, a HomeLight Elite Agent in Midland, Texas. While your financial circumstances must you to buy first, doing so lets you move much quicker and reduces the risk of losing your dream home to another buyer. Clutter, dirty dishes, unmade beds — these are the realities of a lived-in home. If you have kids or pets, god bless them but they do amplify the mess. Trying to sell your house and keep up the appearance of perfection to buyers can be exhausting. You can often sidestep that living nightmare when you buy a house first, enabling you (or you plus the fam) and get settled in your new digs while selling your previous home from a safe distance. Your daily life won’t be disrupted and your house will look like a million bucks (or at least like the top range of its market value!) For real though, a study from HomeLight found that vacant, well-staged homes can sell for up to 10%-18% more.The buy-sell conundrum
Homeowners are equity rich
Many people can’t buy without it
Selling first has its own risks
Can you buy a house without selling yours first?
What are the benefits of buying a house first?
1. You can avoid costly rentals (or your friend’s couch).
2. You can act fast on your dream home.
3. You won’t have to sell your house while living there.
