Selling a home
Should You Sell First or Buy First in the Sacramento Region?
The trade-offs of selling first or buying first, and the tools that bridge the gap: contingent offers, rent-backs and bridge financing.
Is it better to sell your house first or buy first?
Neither is right for everyone. Each one trades one risk for another.
- Selling first gives you a known amount of cash and no risk of owning two homes. The risk is a gap, where you've sold and haven't found the next place yet.
- Buying first lets you choose your next home without a deadline and move once. The risk is carrying two homes, and two sets of payments, until the first one sells.
The right choice depends on your equity, your income, your cash, how much risk you can sleep with and how many homes like the one you want are for sale.
What are the pros and cons of selling first?
Pros: you know your sale price and your cash before you shop. Your offer on the next home doesn't depend on another sale, which sellers tend to like. You won't carry two mortgages.
Cons: you may need somewhere to live in between, which can mean two moves and storage. You may feel pressure to buy the next home faster than you'd like.
Ways to soften the gap include a longer escrow on your sale or a rent-back. Our guide on rent-backs after a sale explains how that works and what to put in writing.
What are the pros and cons of buying first?
Pros: you can take your time finding the right home, move once and then prepare your old home for sale while it's empty. An empty home is often less work to repair, clean, stage and show.
Cons: you need a way to make the down payment before your equity is free. You need to qualify for the new loan while you still own the old home. And you carry both homes until the first one sells.
Before buying first, put the worst case on paper. What would it cost per month to carry both homes, and for how many months could you do it?
What is a contingent offer?
A contingent offer makes your purchase depend on selling your current home. If your home doesn't sell in time, you can usually cancel under the terms of the contract. That protects you from owning two homes.
The trade-off is that many sellers see a contingent offer as weaker, because their sale now depends on yours. It tends to work better when your home is already listed or in escrow, priced in line with recent sales and in a part of the market where homes are moving. Our bridge loans page covers contingent offers alongside the financing options.
How does a rent-back help when selling and buying?
A rent-back lets you stay in the home you sold for a set time after closing. You get your sale proceeds at closing, so you can use them toward your next purchase, and you don't have to move out the same day.
The terms go in a written agreement: how long, what you pay, who covers utilities and repairs, and the deposit. The buyer's loan may limit how long a rent-back can last if they're moving in as their main home. Our guide on rent-backs covers each point.
What bridge financing options are there?
If you want to buy first, these are the common ways to cover the down payment before your home sells:
- A bridge loan is a short-term loan secured by your current home, paid off when it sells. Our bridge loans page explains the costs and risks.
- A home equity line of credit (HELOC) on your current home, opened before you list. Lenders differ on whether they'll open one on a home that's already listed. See our home equity line page.
- HECM for Purchase, for buyers 62 and older, uses a reverse mortgage to buy the next home. It can cut the cash you need and remove a required monthly mortgage payment, though you still pay taxes, insurance and upkeep. See our HECM for Purchase page.
Each option has its own costs and qualifying rules. As a mortgage broker, Maggie compares what several approved lenders offer so you can see real options side by side. You're also free to use any lender you like.
How do downsizers usually handle selling and buying?
Downsizers often have a lot of equity and a smaller next home. That can open options a younger buyer doesn't have, such as buying the next home with a large down payment from savings, or using HECM for Purchase after 62. It also brings questions about property taxes. Our Prop 19 page explains how owners 55 and older may carry their tax base to a new home.
The belongings matter as much as the money. Moving once into the smaller home, then preparing the old home empty, is often gentler on everyone. Our pages on downsizing and Well MOVED™ cover the full move. The blog post on selling first or buying first in Roseville walks through one local version of this question.
How does one team coordinate both sides?
When you sell and buy at the same time, the sale, the purchase and the loan all have to line up. The closing date on your sale affects when your down payment arrives. The loan approval affects how strong your offer is. Contingency dates on both contracts affect how much risk you're carrying.
At Surroundings, Maggie is a real estate broker and a mortgage broker, so all three can sit on one calendar planned by one team. Rachel Dee Minyard, a REALTOR® on the team, works on the listing and the search. That's the convenience: one call, one plan, nothing lost in a handoff. You can also bring your own lender or agent for either side.
How do you get started deciding whether to sell or buy first?
Start with your numbers: what your home is likely to sell for, what you'd net, what you can qualify for and what carrying both homes would cost. Send us a note or call Maggie at (916) 549-3131 and we'll put both paths on paper.
A free home price review gives you the first number. Our free seller guide and buyer guide cover each side of the move.
Frequently Asked Questions
Should I sell my house before buying another one?
Selling first gives you known cash and avoids two payments, but you may need a place to live in between. Buying first lets you move once, but you carry two homes for a while. Your equity, income and comfort with risk decide which fits.
Will a seller accept an offer contingent on selling my home?
Some will, especially if your home is already listed or in escrow and priced well. When several buyers want the same home, a contingent offer can lose to one that isn't contingent.
What is a rent-back?
A rent-back lets you stay in your sold home for a set time after closing under a written agreement. You get your proceeds at closing and move on your schedule.
Can I use my home equity to buy before I sell?
Often, yes, through a bridge loan or a home equity line opened before you list. You need to qualify, and you may carry several payments until your home sells.
Can I buy my next home with a reverse mortgage?
If you're 62 or older, HECM for Purchase can be used to buy a home you'll live in. You still pay property taxes, insurance and upkeep.
Do I have to use your lending if you sell my home?
No. You can use any lender you like. We'd like the chance to quote your loan so you can compare it, and the choice is always yours.
Can I carry my property tax base to my next home?
Owners 55 and older may be able to under Prop 19, with conditions. See our Prop 19 page and confirm with the county assessor and a tax advisor.
More in selling a home
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