How to Buy a House Before Selling Your Old One

Buy a New Home While Selling Your Old House - Buy or Sell First Before Pros & Cons

Buying and selling a home at the same time can be a tricky maneuver. You want to find the perfect new abode for your family, but you also need to offload your current place and transfer the equity to pay for it. It takes careful planning and choreography to swing both transactions without a hitch.

Many homeowners wrestle with the decision of whether to buy or sell first. According to a survey by Richard Morrison, over 60% of recent homebuyers purchased their new residence before listing their old one on the market. This approach can work with the right preparation and expectations.

Key Takeaways

Do Your Homework Before House Hunting

The first step is connecting with a real estate agent who can explain the buy-and-sell process and your various options. Be upfront about your current financial situation, including assets, income, debts, credit, and timelines.

Your agent will likely suggest getting preapproved for a mortgage based on your qualifications. This shows sellers that you’re serious and ready to move forward. It also gives you a price range to work within during your home search.

Before viewing listings, get a comparative market analysis on your current property. This will provide an estimated value and projection of how quickly it might sell. The housing market changes rapidly, so real-time intel is key.

Arm yourself with as much information as possible beforehand so you can make fully-informed decisions. Buying and selling is complicated enough without going in blind.

Map Out a Coordinated Timeline

Ideally, the purchase of your new home and sale of your old home will align perfectly. But real estate transactions rarely work out that conveniently. Expect some overlap between the two.

To avoid paying double housing costs for long, try to schedule the closings within a couple weeks of each other if possible. This involves strategic negotiating.

When buying, request a closing 30-45 days out. For selling, ask buyers for a quick 30 day escrow period before closing. This tight timing puts pressure on everyone, so reasonability is key.

Work closely with your agent to choreograph the sequence. Having an experienced guide is invaluable for navigating the twists and turns.

Below is a sample timeline for buying while selling:

  • Month 1: Get preapproved, search for houses.
  • Month 2: Make an offer on a new home with a 30-45 day closing period.
  • Month 2.5: List your current home, request a quick 30 day escrow period.
  • Month 3: Close on new home purchase.
  • Month 3.5 Close on old home sale.

Creative Financing Options for Down Payments

Coming up with a down payment for your shiny new abode is one of the trickiest parts of buying before selling. Your equity is still tied up in your current property.

Here are some potential solutions to cover the down payment:

Bridge Loans When You Buy Before Selling Your Current House

A bridge loan lets you essentially borrow against the future equity from selling your home. You’ll need 20% equity or more to qualify. It’s basically a short-term cash advance, but interest rates are high. This allows you to make a strong non-contingent offer on the new purchase. Once you close on selling your old place, you repay the bridge loan.

Home Equity Line of Credit (HELOC)

With a HELOC, you’re also borrowing against your current home’s equity at better rates. It functions like a credit card with an open line of credit to draw from as needed. HELOCs require monthly payments on balances. When you sell your old house, the sale proceeds go toward paying off the HELOC.

Retirement Accounts

You can leverage funds in RRSPs as a last resort if you’ve exhausted other options. This involves paying yourself back with interest though. It also impedes future potential growth. If done as a withdrawal before age 59 1/2, you’ll pay hefty early penalties too.

Home Equity Loan 

A home equity loan can be a useful tool for homeowners looking to sell their current home and purchase a new one. One of the main benefits of using a home equity loan is that it allows homeowners to tap into the equity in their current home to fund the down payment on a new home. This can be especially advantageous if you have built up a significant amount of equity in your home over the years.

By leveraging the equity in your current home, you can potentially access a larger down payment and afford the home of your dreams. Additionally, using a home equity loan can also help bridge the financial gap between selling your current home and closing on your new one. This can ease the stress and uncertainty that can come with the buying and selling process. However, it is important to weigh the pros and cons of buying and selling a house before using a home equity loan. It’s crucial to consider factors such as whether to sell first or buy first, how much your home is worth, and the potential cons of buying a house before selling your current home

Add a Home Sale Contingency As Ways To Buy A House

Tell sellers you can’t buy until you sell your existing place. Add a contingency that the purchase is contingent on selling your home within a set timeframe. Sellers may hesitantly agree if they know your place will sell quickly. Offer a sizable earnest money deposit to show commitment.

Having a backup plan takes some pressure off while negotiating the delicate choreography of buy-sell timing. Get creative with financing, and don’t be afraid to ask for terms that accommodate your needs.

Selling Before Buying

Alternatively, you can sell your old house first if the timing doesn’t line up for buying simultaneously. While this avoids the headache of juggling two mortgages, it does mean you’ll be under pressure to purchase again quickly.

Selling first certainly makes securing financing easier since you have the sale proceeds. You may also recoup more equity to reinvest if market conditions rise.

Downsides are spending time in temporary lodging if the sales don’t match up and having less selection on the new purchase. If your market is hot though, selling first can work out fine.

Here are a few options for selling before buying:

Rent Back Your Old House

To avoid moving twice, negotiate a rent-back agreement with buyers of your old place, allowing you to stay a month or two after closing. Offer to cover utilities and up the rent a bit. Most buyers will compromise, so long as they get the keys eventually.

Extend Your Closing

If you have some flexibility, ask for a delayed closing date on selling your home. A long escrow period of 60+ days gives more time to line up your purchase of the next home. Assuming the buyers agree, this can help avoid a gap between transactions.

Request a Lease with Option to Buy

Not ready to sell but found your ideal home? See if the sellers would agree to let you rent the property for a few months with the option to buy within a set period. Offer a higher rent and security deposit. If the sale falls through, negotiate lease terms as a backup.

Consult the Experts

Trying to coordinate buying and selling on your own can quickly overwhelm. Lean on professionals to guide you through the obstacles and keep transactions sailing smoothly.

Real Estate Agent

An experienced real estate agent is invaluable for strategizing timelines, securing financing, negotiating favorable terms, and ensuring you get optimal value both buying and selling. Don’t hesitate to lean on their expertise.

Mortgage Broker

Connecting with a mortgage broker early on lets you get prequalified and weigh different loan products and terms. Brokers can assist with bridge loans and creative financing if needed.

Real Estate Attorney

Validating all contracts and paperwork by a real estate lawyer protects your interests legally and financially. Never sign binding agreements without consulting a qualified attorney first.

With the right team and a coordinated game plan, you can master buying and selling. Just take it step-by-step, ask questions, and don’t be afraid to get creative with your approach. The end result will be well worth the hassle.

Q: Can I buy a new house before selling my old one?

A: Yes, it is possible to buy a new house before selling your old one. This is known as buying a house before selling.

Q: What are the advantages of buying a house before selling my old one?

A: Buying a house before selling your old one allows you to secure your new home before it gets sold to someone else. It also gives you more time to find the perfect home without feeling rushed.

Q: Are there any disadvantages of buying a house before selling my old one?

A: One disadvantage is that you may end up owning two houses at the same time, which could be a financial burden if you’re not able to sell your old house quickly. There is also a risk of not being able to sell your old house at the desired price.

Q: How can I afford to buy a new home before selling my old one?

A: There are a few ways to finance the purchase of a new home before selling your old one. You can use your home equity by taking out a home equity loan or a second mortgage. This allows you to borrow against the value of your current home to fund the purchase of a new one.

Q: Should I sell my current home before buying a new one?

A: It depends on your financial situation and personal preferences. Selling your current home before buying a new one ensures that you have the funds from the sale to use towards your new purchase. However, if you find a new home that you love and don’t want to risk losing it, you can choose to buy before you sell.

Q: What if I can’t sell my old house before buying a new one?

A: If you are unable to sell your old house before buying a new one, you may consider renting it out temporarily or exploring other options such as a bridge loan. A bridge loan is a short-term loan that can help you cover the costs of a new home while you wait for your old one to sell.

Q: What if I find the perfect home before selling my old one?

A: If you find the perfect home before selling your old one, you can make an offer contingent on the sale of your current house. This means that the purchase of your new home is dependent on the successful sale of your old one.

Q: Can I buy another house before selling my old one?

A: Yes, buying another house before selling your old one is possible. It allows you to have a new home lined up while you navigate the process of selling your old house.

Q: Is it possible to get a mortgage for a new home before selling my old one?

A: Yes, it is possible to get a mortgage for a new home before selling your old one. Lenders will take into consideration your current financial situation, including any existing mortgage, when determining your eligibility for a new mortgage.

Q: How do I list and sell my old house while buying a new one?

A: To list and sell your old house while buying a new one, you can work with a real estate agent who can assist you with both processes. They can help you navigate the sale of your old house while also guiding you through the purchase of a new one.

Is It Possible for a Corporation to Buy a House in Canada?

Yes, corporate ownership of homes is indeed possible in Canada. While individuals and families commonly purchase houses, corporations can also acquire real estate properties. However, certain regulations and restrictions may apply.

Conclusion

Buying a new house before selling your old one can be a strategic move to ensure a smooth transition from one home to another. One option is to buy a house before selling your existing home. This allows you to secure your dream home without the pressure of having to rush into a purchase.

By purchasing your new home first, you can take your time finding the perfect property and negotiating the best deal. Once you have found your new home, you can then list your current house for sale. This approach also gives you the advantage of being able to make strong offers on your new house with the confidence that your current home will sell. Another option is to secure a new mortgage that allows you to buy your new home before selling the old one. By doing this, you have the flexibility to move into your new home before your current home sells.

However, it is important to carefully consider your financial situation and ensure that you can afford to make the payment on your new home until your old home sells. Overall, buying a new house before selling your old one can be a beneficial strategy if done properly and with careful planning.

Sources:
https://www.thestar.com/life/homes/2022/03/04/should-you-buy-first-or-sell-first-it-depends-on-the-market-and-your-risk-tolerance.html


Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.

Lets Have a Smart Conversation.

Let's Chat! Looking for a REALTOR© who can exceed your expectations? Look no further than Richard Morrison! His mission is to serve without limit & provide solutions that cater to your core needs.
* 20+ Years of Experience
* Medallion Member
* RE/MAX Hall of Fame

Your Privacy is important to us. View our Privacy & Data Collection Policy.

Latest Vancouver Listings

Active
$679,800
1609 233 ROBSON ST, Vancouver Condos for sale, MLS® R2853283

Bed: 1Bath: 1Built in 2009574 sqft

3 mins ago

Bed: 1Bath: 1Built in 2009574 sqft

Welcome to TV Towers, located in Vancouver's finest downtown! This...

$679,800

MLS®: R2853283 Real Broker

3 mins ago

Active
$2,950,000
401 1311 BEACH AVE, Vancouver Condos for sale, MLS® R2853274

Beds: 3Baths: 3Built in 19891647 sqft

32 mins ago

Beds: 3Baths: 3Built in 19891647 sqft

VIEWS FOREVER and unbeatable BEACHFRONT LOCATION. Escape to your own...

$2,950,000

MLS®: R2853274 Real Broker

32 mins ago

Active
$565,000
505 22 E CORDOVA ST, Vancouver Apartments for sale, MLS® R2853266

Bed: 1Bath: 1Built in 1997581 sqft

32 mins ago

Bed: 1Bath: 1Built in 1997581 sqft

Welcome to the Iconic Van Horne, a concrete building in the heart of the...

$565,000

MLS®: R2853266 Stilhavn Real Estate Servic...

32 mins ago

Active
$888,000
302 2736 VICTORIA DR, Vancouver Apartments for sale, MLS® R2853265

Beds: 2Baths: 2Built in 1991979 sqft

33 mins ago

Beds: 2Baths: 2Built in 1991979 sqft

LOCATION LOCATION - 2 Bed/2 Bath Condo in the sought after neighborhood...

$888,000

MLS®: R2853265 Oakwyn Realty Ltd.

33 mins ago

Active
$1,828,000
1718 KILKENNY RD, North Vancouver Houses for sale, MLS® R2853312

Beds: 4Baths: 3Built in 19611928 sqft

36 mins ago

Beds: 4Baths: 3Built in 19611928 sqft

Terrific family home on one of the most quiet, sought after streets in...

$1,828,000

MLS®: R2853312 RE/MAX Crest Realty

36 mins ago

Active
$699,000
907 5028 KWANTLEN STREET BC, Vancouver, R2853259

Beds: 2Baths: 2Built in 2006831 sqft

55 mins ago

Beds: 2Baths: 2Built in 2006831 sqft

SEASONS BY POLYGON !You'll adore this luminous and roomy south-facing...

$699,000

MLS®: R2853259 Magsen Realty Inc.

55 mins ago

Active
$2,150,000
PH 1801 1009 HARWOOD ST, Vancouver Condo for sale, MLS® R2853256

Beds: 3Baths: 3Built in 20141667 sqft

55 mins ago

Beds: 3Baths: 3Built in 20141667 sqft

STUNNING 3 BED/3 BATH + DEN PENTHOUSE w WATER, MOUNTAIN, & CITY VIEWS!...

$2,150,000

MLS®: R2853256 Angell, Hasman & Associ...

55 mins ago

Active
$1,138,888
201 3368 MAIN ST, Vancouver Homes for sale, MLS® R2853255

Beds: 2Baths: 2Built in 19981205 sqft

55 mins ago

Beds: 2Baths: 2Built in 19981205 sqft

Experience the essence of urban living in this unique townhouse situated...

$1,138,888

MLS®: R2853255 Magsen Realty Inc.

55 mins ago

Active
$998,800
204 5955 IONA DR, Vancouver Condo for sale, MLS® R2853246

Beds: 2Baths: 2Built in 20061014 sqft

2 hours ago

Beds: 2Baths: 2Built in 20061014 sqft

Welcome to FOLIO by INTRACORP on UBC Campus! This 1014 SF 2 BED + DEN + 2...

$998,800

MLS®: R2853246 eXp Realty

2 hours ago

Active
$809,000
119 3133 RIVERWALK AVE, Vancouver Apartment for sale, MLS® R2853234

Beds: 2Baths: 2Built in 2013911 sqft

2 hours ago

Beds: 2Baths: 2Built in 2013911 sqft

Welcome to this lovely 2 bedroom & den "townhome feeling" Polygon...

$809,000

MLS®: R2853234 Oakwyn Realty Encore

2 hours ago

Active
$639,000
218 3456 COMMERCIAL ST, Vancouver Condo for sale, MLS® R2853222

Bed: 1Bath: 1Built in 2015605 sqft

2 hours ago

Bed: 1Bath: 1Built in 2015605 sqft

Welcome to Mercer! Functional layout with a west facing balcony...

$639,000

MLS®: R2853222 Stilhavn Real Estate Servic...

2 hours ago

Active
$715,000
605 1008 CAMBIE ST, Vancouver Apartments for sale, MLS® R2853220

Bed: 1Bath: 1Built in 1998761 sqft

2 hours ago

Bed: 1Bath: 1Built in 1998761 sqft

This renovated owner occupied unit is located at the popular "Waterworks"...

$715,000

MLS®: R2853220 RE/MAX All Points Realty

2 hours ago

Active
$1,300,000
801 1428 W 6TH AVENUE BC, Vancouver, R2853219

Beds: 2Baths: 2Built in 20031115 sqft

2 hours ago

Beds: 2Baths: 2Built in 20031115 sqft

This Light-Filled 2 bed and 2 bath concrete home at the Siena of Portico...

$1,300,000

MLS®: R2853219 RE/MAX Crest Realty

2 hours ago

Active
$799,000
2205 3430 E KENT AVE SOUTH, Vancouver Condo for sale, MLS® R2853215

Bed: 1Bath: 1Built in 2024530 sqft

3 hours ago

Bed: 1Bath: 1Built in 2024530 sqft

Paradigm by WesGroup! Deluxe brand new 1 bedroom plus den unit in the...

$799,000

MLS®: R2853215 RE/MAX Real Estate Services

3 hours ago

Active
$1,999,000
721 666 LEG IN BOOT SQUARE, Vancouver Apartment for sale, MLS® R2853213

Beds: 3Baths: 2Built in 19782723 sqft

3 hours ago

Beds: 3Baths: 2Built in 19782723 sqft

Remarkable one-of-a-kind gem nestled atop Vancouver’s skyline. Set against...

$1,999,000

MLS®: R2853213 Oakwyn Realty Ltd.

3 hours ago

Active
$1,443,900
105 4240 CAMBIE STREET BC, Vancouver, R2853210

Beds: 2Baths: 2Built in 2023970 sqft

3 hours ago

Beds: 2Baths: 2Built in 2023970 sqft

Introducing Savoy by Aria Pacific. Designed by local architectural firm -...

$1,443,900

MLS®: R2853210 Magnum Projects Ltd.

3 hours ago

Active
$579,500
2708 5665 BOUNDARY ROAD BC, Vancouver, R2853209

Bed: 1Bath: 1Built in 2016492 sqft

3 hours ago

Bed: 1Bath: 1Built in 2016492 sqft

Beautifully designed 27th floor 1 bedroom condo unit with amazing view...

$579,500

MLS®: R2853209 Sutton Group-West Coast Rea...

3 hours ago

Active
$648,000
1805 4815 ELDORADO MEWS, Vancouver Apartment for sale, MLS® R2853208

Bed: 1Bath: 1Built in 2013551 sqft

3 hours ago

Bed: 1Bath: 1Built in 2013551 sqft

AMAZING UNOBSTRUCTED VIEWS with this 1 bedroom+Den,1 bath condo in the...

$648,000

MLS®: R2853208 eXp Realty

3 hours ago

Active
$899,999
102 2250 SE MARINE DR, Vancouver Condo for sale, MLS® R2853206

Beds: 3Baths: 2Built in 19901218 sqft

3 hours ago

Beds: 3Baths: 2Built in 19901218 sqft

3 bedroom unit on SE marine dr in Vancouver, this private, ground floor,...

$899,999

MLS®: R2853206 City 2 City Real Estate Ser...

3 hours ago

Active
$629,000
602 111 W GEORGIA ST, Vancouver Condos for sale, MLS® R2853192

Bed: 1Bath: 1Built in 2007632 sqft

3 hours ago

Bed: 1Bath: 1Built in 2007632 sqft

One of the brightest homes in the heart of the city's entertainment...

$629,000

MLS®: R2853192 Oakwyn Realty Ltd.

3 hours ago

Start your search with Richard Morrison, Top Award Winning Vancouver Realtor:

Contact Richard Morrison Top Vancouver Realtor today to find a Vancouver real estate and Vancouver condos for sale. This includes eastside residences and eastside apartment for sale. Also check out West Vancouver homes for sale or maybe an West Vancouver condos for sale. If you prefer North Shore, take a look at our listings in North Vancouver homes for sale and North Vancouver condos for sale.

Vancouver East Houses

Collingwood
Downtown East
Fraser
Fraserview
Grandview
Hastings
Hastings Sunrise
Killarney
Knight
Main
Mt Pleasant
Renfrew Heights
Renfrew
South Van
Victoria

Vancouver West Houses

Arbutus
Cambie
Dunbar
Kerrisdale
Kitsilano
McKenzie Heights
Marpole
Oakridge
Point Grey
Quilchena
SW Marine
Shaughnessy
South Cambie
South Granville
University
West End

Vancouver East Apartments

Champlain Heights
Collingwood
East Downtown
Fraser
Grandview Woodland
Hastings
Hastings Sunrise
Killarney
Knight Condos
Main
Mount Pleasant VE
Renfrew Heights
Renfrew
South Marine
South Van
Strathcona
Victoria VE

Vancouver West Condos

Arbutus
Cambie
Coal Harbour
Downtown VW
Dunbar
Fairview
False Creek
Kerrisdale
Kitsilano
Marpole
Mount Pleasant VW
Oakridge
Point Grey
Quilchena
S.W. Marine
Shaughnessy
South Cambie
South Granville
Southlands
University
West End VW
Yaletown
img

Richard Morrison

My name is Richard Morrison and I aim to empower people to buy and sell real estate in the most effective way possible. I can service all of your Metro Vancouver real estate needs & beyond. I specialize in Vancouver, North Vancouver, West Vancouver, Vancouver West, Richmond, Burnaby and other areas in the Lower Mainland BC Canada. You can be assured that whether buying or selling your home, I will get the job done. I offer a full compliment of real estate services with 15+ years of experience. About Richard Morrison

Related posts

Ozzie Jurock’s Vancouver Real Estate Market 2024 Ozbuzz Forecast

As 2024 starts, it's time to reflect on 2023 as another year of twists and turns in Canadian real...

Continue reading
by Ozzie Jurock

Annual Events in Vancouver

I have lived in Vancouver for over 30 years and I have experienced many of these events myself....

Continue reading
by Richard Morrison

Is AirBnB Allowed in Vancouver?

When it comes to deciding whether Airbnb is allowed in Vancouver BC, the answer depends...

Continue reading
by Richard Morrison