Buying and Selling at the Same Time

Many folks find themselves in a situation where they are buying a home at the same time they are selling their home.  There are ways to make this work with contingencies and different loan types.


A contingency is a great way to be able to do the simultaneous buy/sell.  In your purchase agreement, you may add that the purchase of the home is contingent on the sale of your current home.  This can be placed in whether your current home is under contract or not.   If the home doesn’t sell in time, if the seller agrees, you may be able to sign an extension to allow more time to sell your home.  Many times, the purchase contract will allow you to back out of the purchase if your home does not occur in time.  Unfortunately, for some sellers, this may be a deal breaker and will not want to accept the contingency.


In situations with the dual sell/purchase, there are different ways to have the money available to cover both deals.  One option is a bridge loan.  This is nice to use when the purchase closing does not match up with their sale closing.  A bridge loan can be secured using your home that is for sale.  It can be used to cover the down payment and help with juggling two mortgages. Once you sell your home, you can use that money to pay off the bridge loan. While this is a shorter term loan, it can have a high interest rate.

Another option, is a home equity loan or line of credit.  The home equity loan uses your home as collateral.  It puts a lien on your home.  The equity in your home will, also, be reduced.  With the home equity line of credit, your home is, also, used as security.  However, the line of credit does not give you the money all at once.  You can take it out as needed, until your reach max credit.  The home equity line of credit has lower but variable rates.

While it may be a little harder and may need a little creativity to get it done, you can buy and sell at the same time.  Ask your lender about the best option for you.

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