Buying and Selling a House at the Same Time: Where to Begin

Buying a new home at the same time as you’re selling your old home is all about timing — and some luck, of course. While you can’t control everything that happens during the buying and selling process, there are some things you can do to set yourself up for smooth closings — maybe even on the same day!

Here are some key tips on how to buy and sell a house at the same time.

Know the housing market in both places

The state of the real estate market in your area is often the biggest factor in timing your home purchase and sale while minimizing the gap between homes. The length of time it takes to buy and sell can vary dramatically depending on whether it’s a buyers or sellers market, both in your current location and new one, and whether you’re buying across town or across the country.

What is a buyers market?

In a buyers market, there are more homes available than people looking to buy. You may have an easier time finding your new home than you will selling your old home. For your new home, the sellers may be willing to accept a contingent offer, which means you agree to purchase their home contingent on selling yours first — more on that later.

What is a sellers market?

In a sellers market, there are more buyers in the marketplace than there are homes available. Your current home may sell more quickly than the time it takes to find a new home. You may consider asking your buyer to do a rent-back after closing to allow you time to find your new place.

Understand your finances

Once you have a feel for the market, it's time to crunch the numbers — starting with your current home. Understanding what you'll likely walk away with from your sale will shape everything from your buying budget to which financing path makes the most sense for you.

Estimate your home's value and sale proceeds

Start by getting a sense of your home's current market value. You can check your Zillow Zestimate as a starting point or ask your real estate agent for a comparative market analysis. From there, you can use Zillow's Home Sale Calculator to estimate your net proceeds, meaning what you'll actually walk away with after accounting for the following:

• Your mortgage balance. Any outstanding mortgages or HELOCs on the home will be paid off at closing from your sale proceeds.
• Agent commissions. Seller's agent commission typically ranges from 2.5% to 3% of the sale price. You may also be asked to contribute toward the buyer's agent commission, though this is negotiable.
• Repairs and concessions. A pre-inspection can help you get ahead of this — it lets you identify issues buyers would flag and decide whether to fix them upfront or factor in likely concessions.
• Capital gains tax. If your home has appreciated significantly, you may owe capital gains tax on a portion of your profit. Talk to a tax advisor to understand your exposure before you sell.

Estimate your home-buying budget

Once you have a sense of your likely proceeds, you can start to build your buying budget. How much can you put toward a down payment? What loan amount do you qualify for? Reach out to your mortgage lender or financial planner to understand your options, like the amount of liquid cash you have, your estimated equity, and the loan products you qualify for will all shape which path makes the most sense for you. You can also use Zillow's Affordability Calculator to get a quick estimate of your price range.

Find an experienced real estate agent

Buying and selling at the same time can be complicated and at times overwhelming, so it’s helpful to have a pro by your side. An experienced local agent will not only help you determine the market value of your current home, but also guide you through timing, strategy, and negotiation. If you choose, they’ll likely also be able to help you find your next home and all that entails — tours, negotiation, and more.

Make sure your agent understands your goals

A good real estate agent will take some time to get clear on your priorities. They may ask you why you want to sell, what you’re looking for in your next home, your ideal timeline, and more. If you're buying and selling in the same market, look for an agent who has experience handling both sides of a transaction so it can make coordination smoother.

Getting the list price right

One of the most important roles your agent plays is to help you find the right listing price — one that will help you sell on your desired timeline and for enough money to help you take that next step. They’ll use their local market expertise and comparables to inform the price. 

How to buy a house before selling yours

If you choose to buy your new home before selling your current home, here are some ways to make it happen:

Make an offer with a sale and settlement contingency: In this scenario, you’ll focus on finding a new home before you list the old one. Once you find a house you love, you’ll submit your offer with a sale and settlement contingency, which means you’ll buy the home only if you can successfully sell your existing home. Typically, the sellers of the home you’re buying are still allowed to seek other offers. This type of contingency often works best in buyers markets, when the seller is less likely to get another offer.

Request an extended closing: If you’re confident that your existing home will sell in a short period of time, you can request to extend the closing date of your new home, past the standard 30-45 days. This may give you enough time to sell your current home and use the proceeds to buy another house. Just like with contingent on sale offers, you’re more likely to have success with this strategy in a buyers market.

Purchase with savings: If you’re in the financial position to do so, the simplest route is to use your savings to either buy the new home in cash, or pay the down payment and closing costs on the new home, then sell your old home after the dust settles. Keep in mind that you’ll also likely need money to cover moving expenses and any repairs.

Purchase with a HELOC: A HELOC, or home equity line of credit, allows you to borrow against the equity in your current home. If you qualify, you could use a HELOC to access money for your down payment, then pay  off the line of credit when your home sells. Keep in mind that your HELOC balance must be paid off at or before closing when you sell; this typically comes from your sale proceeds.

Purchase with a bridge loan: A bridge loan is a short-term loan offered by a lender to cover your down payment, just until your sales close. Make sure to talk to your lender about this option early in the process, because not all lenders offer this product and it can be hard to qualify.

Rent out your old home: If you don’t need the money from your old home to buy a new home, you may want to consider renting out your old home, which could cover some or all of your mortgage and other carrying costs. That way, you won’t need to sell at the same time as you’re buying. You’ll have to be comfortable with being a landlord, however. 

Pros of buying before selling

• You have somewhere to move right away.
• You only have to move once, which allows you to save money on storage units or temporary housing costs.
• You’re less pressured to make quick buying decisions, as you can stay in your current home a little longer if you don’t find a property you love.

Cons of buying before selling

• You may feel rushed to sell, which may lead you to take a lower offer than you would otherwise.
• A contingent on sale offer may be less competitive, especially in fast-paced markets.
• You may not have enough cash to make a competitive offer if your money is tied up in your current home.
• If you decide to rent out your current home, being a landlord isn’t always a walk in the park. When you do decide to sell, it can be a challenge to show the home if tenants are still living there.

How to sell your home and buy a new one

If you’ve decided to sell your current home first, here are some steps you can take to make the process a bit smoother:

Make an offer with a settlement contingency: In this case, you’ll list your house first, then once you have an offer in hand (but before closing), you’ll start looking for your new digs. When you find a house you love, you’ll submit an offer with a settlement contingency, which means you’ll buy the home contingent on the sale of your existing home closing. This works best in a sellers market, where you expect to receive offers on your existing home fairly quickly.

Find a temporary rental to live in: Yes, you'll have to move twice, but sometimes closing one sale before starting another one can be the least stressful option, as it takes the pressure off the timing and gives you the time to find a home you really love.

Sign a rent-back: A rent-back provision is when you go through with the sale of the home, with the agreement that you can rent the home back from the new owners (and keep living in your home) for a day, a few days, or even weeks or months. This option can give you more time to shop for your new home, while still giving you access to the money from your sale. Keep in mind that this option mostly works best in a sellers market, where buyers have to be more flexible with contract terms in order to get the home they want.

Pros of selling before buying

• You know exactly how much equity you’ll have available to put toward your new home.
• You can easily roll your existing equity into the new purchase.
• It can be less stressful to close the book on one chapter before focusing on your next move.

Cons of selling before buying

• You’ll likely have to find a temporary living situation.
• Storage and double moving costs can add up.

Ready to take the next step? Once you've closed on your new home, we’ve got advice on what to do after buying a house.