Can You Buy a New Home Before Selling Your Current One?

By Chip Free

Chip Free is a seasoned real estate advisor with Lake Realty, a locally established firm in Lake Norman that his father founded over 30 years ago.

In an ideal world, the sale of your old home would line up perfectly with the purchase of your new one. But in reality, real estate transactions don’t always go that smoothly. You might find your dream home before your current one sells—or worse, sell your home and have nowhere to go. So, can you buy a new home before selling your current one? The short answer is yes, but it requires careful planning. Let’s explore your options.

1. Sale contingencies and delayed closings. One option is adding a sale contingency to your contract, meaning your new home purchase depends on selling your current home first. However, a ‘true contingency’ has become less common in our area since the NC Realtors removed the standard contingency form in July of 2020. We can still structure the deal including the due diligence fee, the earnest money deposit and closing date to ensure you don’t get stuck with two mortgages or lose money if your buyer backs out.

2. Bridge loans and rent-back agreements. If you need financial flexibility, a bridge loan can cover the gap between buying and selling, allowing you to make a strong, non-contingent offer. Just keep in mind that bridge loans usually come with higher interest rates and shorter terms. Another strategy is a rent-back agreement, where you sell your current home but stay in it temporarily, paying rent to the new owner while you finalize your next move.

3. Explore alternative solutions. If those options don’t work, there are other creative ways to make the transition smoother. Companies like Flyhomes, Orchard, and Knock offer programs that help you buy before you sell. You could also consider renting out your current home for passive income or selling to an iBuyer for a fast, cash transaction. However, keep in mind that convenience often comes at a lower sale price.

While buying before selling can be convenient, it’s not always the best financial move. Carrying two mortgages at once or relying on a quick home sale can be risky. That’s why working with an experienced real estate agent is crucial—they can help you navigate the market and find the best approach for your situation.

If you’re considering buying a new home before selling your current one, let’s talk. I’ll walk you through your options and help you make the best decision based on your unique situation. Schedule a call today, and let’s create a strategy that works for you!