Buying and Selling a Home at the Same Time: Your Options

Buying and selling a home at the same time is one of the trickiest balancing acts in real estate. You need the money from one house to help buy the next, but you also don't want to be homeless for a week, or paying two mortgages longer than you planned. The good news is that there are only a handful of ways to sequence it, and each one trades something for something else. Here's how I walk homeowners through them, plus what a lender actually looks at when you still own your current home.

If you're deciding whether this is the right season to move at all, my article on whether now is a good time to buy a house is a good companion.

This is the simplest path on paper. You list your home, accept an offer, close, and then use your proceeds toward the new purchase.

Can I buy a new home before my old one sells?

Often yes, but the lender must count the old home's payment unless an exception applies. The question is whether you can qualify with both payments in your debt-to-income ratio.

Will my lender count both mortgage payments?

For Fannie Mae loans, the payment on the old home normally counts unless you have an executed sales contract and confirmation that financing contingencies have cleared. Other programs have their own rules.

What is a contingent offer?

It's an offer that depends on a condition, in this case the sale and closing of your current home. In Texas, TREC publishes an addendum for this purpose, form 10-6.

Is a HELOC a good way to fund the down payment on the next home?

It can be one tool, but the CFPB warns that HELOCs often have variable rates and that you could lose your home if you can't repay. We should look at your whole plan first.

What is a rent-back?

It's an agreement that lets you stay in the home you sold for a short time after closing. Terms are negotiated and should be written down by your agent or attorney.