How to Buy and Sell a House at the Same Time

Selling your house and buying another home at the same time is the ultimate feat in multitasking — one that comes with a tricky timing challenge.

If you buy a new home before selling your current one, you could be stuck paying for the mortgage and maintenance on two homes at once. On the other hand, if you sell your house before buying, you might have nowhere to go after the sale closes.

With proper planning, the right financing and strategic pricing and negotiating, it’s entirely possible to time the sale and the new purchase in a way that works for you.

Here are some strategies to make it come together.

Laying the groundwork for buying and selling

There's lots of prep work for buying and selling, so start getting ready for both as soon as you can.

Get ready to sell

A good listing agent can provide guidance on how to prepare your home for the market.

Part of that means making necessary repairs, decluttering and cleaning. A cluttered, lived-in looking home hurts marketability.

After cleaning and decluttering, get photographs and videos of the home completed so those materials are set to go when you're ready to list the property.

» MORE: How to sell your house

Get ready to buy

First things first: Get your finances in order — even if you have strong credit and you’re sure you’ll get approved. Each lender has different guidelines and those guidelines can change.

If you’re buying in a hot housing market, you'll either need to have cash to buy it outright or be fully preapproved for a mortgage to finance the home, without any conditions from a lender that your existing home must sell first.

Having a preapproval letter shows sellers you’re a serious homebuyer and will help you stand out.

How to make the money work

When selling your home, you’ll use the proceeds to pay off the mortgage and then apply any remaining money toward the next property.

But until that sale closes, you'll need cash on hand for a down payment and financing lined up for the next home.

Some homeowners tap into savings accounts or brokerage accounts for the down payment on the next house. But not everyone has a hefty enough balance to make that work.

Here are some other options.

Home equity line of credit

You could use a home equity line of credit, or HELOC, on your current home to draw cash for the down payment. But you'll need to have the HELOC already in place — a lender won't approve the credit line after you list it for sale.

Bridge loan

With a bridge loan you can borrow up to 80% of your home's value to pay off the old mortgage and put any remaining money toward a down payment on another home. Or you can use a bridge loan as a second mortgage to borrow a portion of your home equity for a down payment.

You usually make interest-only payments during the loan term, and then pay off the loan in its entirety as one balloon payment when the term ends.

The maximum term is typically a year, but usually, bridge loans are paid off much more quickly because they're designed to fill that short gap between the old-house sale and new-house purchase.

Some applicants who get approved for bridge loans don't even need to use them because the sale ends up closing before the purchase after all.