Can I buy a new home before selling my current one?
Answered by Chris Deutsch, Founder & Editor
Licensed Minnesota Realtor #20382264 ·
The short answer
Yes — but the question isn't 'can you?' The question is 'should you?' And that depends on your financial position and your risk tolerance.
On stage The 60-second answer
Captions on · Transcript below
The stage is set.
Chris's video answer is on its way. Until then, the short answer above says the same thing.
The transcript posts with the video.
The longer answer
Three ways to do it
1. Contingent offer. You make an offer on the new home contingent on selling your current home. The risk? Sellers hate contingencies in competitive markets. Your offer is weaker. In a hot neighborhood like Linden Hills, contingent offers get passed over.
2. Bridge loan. Short-term financing that lets you buy before you sell. You borrow against your current home's equity to fund the down payment on the new one. When your current home sells, you pay off the bridge loan.
The catch: Bridge loans carry higher interest rates and closing costs. You're essentially carrying two mortgages temporarily. In my experience, this works best if your current home is priced to sell quickly — not if you're going to 'test the market.'
3. Home equity line of credit (HELOC). Open a HELOC on your current home before listing. Use it for the down payment. Pay it off when you sell. Lower rates than bridge loans, but you need enough equity and income to qualify.
The move I recommend most often: Sell first, rent temporarily, buy without pressure. It's the least stressful path. But if you can't stomach a temporary move, the bridge loan approach works — with careful planning and honest numbers.
The next department over
What people in this spot usually ask next.
- The simultaneous buy-sellWhat happens if I can't sell my current home fast enough?Read the answer
- Financing & ratesWill the bank count our current mortgage against us when we buy the next house?Read the answer
- Financing & ratesCan we use a HELOC on our current house for the down payment on the next one?Read the answer
- Relocation to the Twin CitiesHow do I buy a home sight-unseen when relocating?Read the answer
- Buying processHow long does the home buying process actually take?Read the answer
- Buying processHow much house can I actually afford in the Twin Cities?Read the answer
From the editor's desk
“As Founder and Editor, I review, correct, and stand behind every answer.”
Is your situation more specific than the market? That's the one worth talking through.