House Hunting: How to ‘Buy Before You Sell’ With HomeLight
- Published on
- 14 min read
-
Richard Haddad Managing EditorClose
Richard Haddad Managing EditorRichard Haddad is the managing editor of HomeLight.com. He works with an experienced content team that oversees the company’s blog featuring in-depth articles about the home buying and selling process, homeownership news, home care and design tips, and related real estate trends. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations.
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
Selling your home and buying a new one at the same time can feel like walking a financial tightrope. If you’re like most Americans, you need the proceeds from the sale of your current home to buy your next home. You’re likely counting on earned equity to fund your deposit and cover closing costs. If you could, you’d prefer to buy before you sell.
The concept of “buy before you sell” may sound too good to be true, but with HomeLight, it can be a reality.
“The benefit of buying before selling is peace of mind,” explains Christine Marion, a HomeLight Buy Before You Sell Certified agent who serves on the top-performing Ryan Raymond team in Sarasota, Flordia.
“With the right program, you can purchase a home before selling by using some of your equity in advance,” she explains. “This gives you the chance to move out after the purchase of your new home, where there’s less pressure to sell. It alleviates the fear of not having a place to live… and can also lead to a more profitable sale of your old home.”
This guide will walk you through the process, showing how HomeLight’s unique program can transform your house-hunting and selling experience.
Yes, You Can Buy Before You Sell. Why Move Twice?
Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
What does ‘buy before you sell’ mean in real estate?
In the realm of real estate, the term “buy before you sell” is commonly used to refer to a strategy where homeowners purchase a new property before selling their existing home.
This approach offers a solution to the classic catch-22 of moving: needing to sell your current home to finance the next, yet not wanting to be left without a place to live in the interim. This route is also appealing to those who don’t want to move twice, and to sellers who want to prepare, stage, and sell their home without anyone living in it.
“The conventional method of selling before buying often involves a tight timeline and the potential stress of finding a new home quickly after a sale,” says
Conversely, buying before selling allows for a more relaxed house-hunting experience, with the added benefit of moving into your new home right away.
Pros and cons of buying first vs. selling first
When considering whether to buy a new home before selling your current one, it’s essential to weigh the advantages and disadvantages. Each approach has its unique set of benefits and challenges.
Let’s explore the pros and cons of buying first, a strategy that prioritizes securing your next home before parting with your current one. This can offer remarkable convenience, but it’s not without financial and logistical considerations.
Pros of buying first
- Peace of mind: Securing a new home first eliminates the uncertainty of relocation, offering a clear destination post-sale.
- Smooth transition: Move directly from your old house to the new one, bypassing the need for temporary housing or storage.
- Strategic position: In competitive markets, this approach ensures you don’t miss out on your dream home due to sale delays.
- Flexible timelines: Enjoy the luxury of time to plan your move, decorate, or renovate your new home before settling in.
Cons of buying first
- Financial strain: Risk of managing two mortgages if your current home doesn’t sell quickly.
- Market risk: Potential loss if property prices drop between buying the new home and selling the old one.
- Pressure to sell: The urgency to sell your current house might lead to rushed decisions or lower selling prices.
- Tied-up equity: The equity from your current property, which could be used to finance or reduce the mortgage on your new home, remains inaccessible.
“Unless you have the help of a ‘buy before you sell’ program, buying first can be risky,” Marion explains. “Sellers need to be comfortable carrying two mortgages until the main home sells. And when you’re selling your home, sometimes you’ll get a contingency on sale when somebody is offering to buy your house and also selling their house. You’ll want to carefully assess your financial situation to make sure that you can handle those two mortgages and have a backup plan in case your home doesn’t sell as quickly as you hope.”
On the other hand, opting to sell your home before buying a new one also presents a distinct array of pros and cons. This game plan can give you some financial confidence, but may lead to temporary housing challenges and rushed decisions in your subsequent home purchase.
Pros of selling first
- Financial clarity: Selling first provides a clear budget for your next purchase because you’ll know exactly how much money you have from the sale.
- No double mortgages: Avoids the financial challenge of dual mortgage payments.
- Negotiation power: Without the pressure of a property waiting in the wings, you can be more strategic in negotiating the sale price of your current property.
- Freedom to wait: Without a new home demanding your immediate attention, you can move into temporary housing and take your time to find the perfect next home. You may even want to travel and leave belongings in storage.
Cons of selling first
- Housing gap: The expense and hassle of needing temporary housing between selling your current home and buying a new one.
- Rushed decisions: Pressure to quickly find a new home might lead to compromises or hasty choices.
- Market volatility: Depending on the market, rising property prices post-sale could increase the cost of your next home.
- Temporary inconveniences: The logistical challenges and stress of moving twice, first into temporary housing and then into your new home.
While there are benefits and drawbacks to both these options, there is a modern way to streamline the entire transition and reduce obstacles and concerns. HomeLight Buy Before You Sell can give you the best of both worlds.
How does HomeLight Buy Before You Sell work?
HomeLight’s Buy Before You Sell program simplifies your transition to a new home. It allows you to purchase your next home before selling your current property.
“This balancing act of trying to sell and buy at the same time affects nearly every homeowner,” Sloss says. “We’ve made the process of ‘buy before you sell’ super streamlined so you can focus on finding the right home and getting the best deal possible — without worrying about contingencies or moving deadlines.”
Here’s how it works in three steps:
1. Apply in minutes with no commitment: Find out if your property is a good fit for the program and get your equity unlock amount approved in 24 hours or less. No cost or commitment is required.
2. Buy your dream home with confidence: Once you’re approved, you’ll have access to a portion of your equity in your current home. You’ll be able to submit a competitive offer with no home sale contingency at any time — regardless of how long it takes to find your dream home. Our near-instant Equity Unlock Calculator lets you estimate how much equity we can unlock from your current home.
3. Sell your current home with peace of mind: After you move into your new home, we will list your unoccupied home on the market to attract the strongest offer possible. You’ll receive the remainder of your equity after the home sells.
“When you’re hunting around for your dream home, you may find it tomorrow, you may find it in three weeks, or it may take six months or a year. You don’t know, Sloss says. “But if you get pre-approved for Buy Before You Sell, and you hold that in your tool belt or in your back pocket, you’re ready to go as soon as you find that perfect home. And that is going to give you an edge when you need to make an offer in a competitive situation.”
»Get started today at this link: homelight.com/buy-before-you-sell
Benefits of HomeLight Buy Before You Sell
- Flexibility in timelines: No need to match up the sale and purchase dates of your move perfectly. You’ll have breathing room to plan without feeling rushed or pressured.
- Financial peace of mind: HomeLight Buy Before You Sell can remove the stress of potential double mortgages or dipping into savings to bridge the gap between properties.
- Enhanced buying power: In a low-inventory or competitive market, a non-contingent offer can stand out and get the seller’s attention, increasing your chances of landing the home you want.
- Sell for up to 13% more: After you move, you can list your old home unoccupied and potentially staged, which traditionally leads to a higher selling price, according to HomeLight home sale data.
“Staged homes sell for more than homes that are sold with the people still living in them,” Sloss says, referring to a recent HomeLight survey of more than 1,000 top agents across the country. “And you can imagine that because if you’re going to buy a home — and you see a beautifully staged house or even just a clean house that’s totally vacant — you can project what you want onto it rather than viewing someone else’s house that they live in.”
Sloss also notes that the benefit of enhanced buying power is especially valuable in a low-inventory market. “If you are looking to buy a home, you want your offer to be as competitive as possible no matter what,” he says. “You want to remove as many contingencies as you can. And the most important impactful contingency that you can remove is your home sale contingency.”
What people are saying about HomeLight and Buy Before You Sell
“We not only had the advantage of moving into our new home before listing our old home but also were able to sell for more than expected.” — Hunter W. and Angela B. of Sunland, California, (Their old home sold for $159,000 over asking price.)
HomeLight also offers other real estate services for buyers and sellers, such as Agent Match to find top real estate agents, and Simple Sale, a convenient way to receive a no-obligation, all-cash offer to sell your home in as little as 10 days.
“I couldn’t be happier with my experience with HomeLight and their amazing staff! I can honestly say that it’s been my best experience with any of the seven property purchases I’ve made over the years. They were responsive, helpful, and patient. I couldn’t recommend them more highly.” — Joseph A. of San Diego, California
HomeLight was founded in 2012 and has an accredited A+ rating with the Better Business Bureau. The company has earned a 4.8-star Google Review rating from past clients. You can read more customer testimonials at this link.
Curious What Your Home Is Worth?
Get a near-instant real estate house price estimate from HomeLight for free. Our tool analyzes the records of recently sold homes near you, your home’s last sale price, and other market trends to provide a preliminary range of value in under two minutes.
FAQs about HomeLight Buy Before You Sell
It’s free to get started and see how much equity you can unlock. If you decide to transact using the program, there is a flat fee of 2.4% of the departing residence home sale. (Program requirements and fees are subject to change. Click here for the most current details.)
The amount of equity you can unlock is determined using our proprietary algorithm, which takes into consideration an estimation of the home’s value, current market conditions, projected market risk, borrower financials, outstanding loans, and more. You’ll be able to unlock a portion of the overall equity you have in your home upfront through HomeLight Home Loans, Inc., prior to selling the home — and will receive the remainder of your equity after the home sells, less transaction and program fees.
Not a problem! We consider all properties for the program regardless of days on market, and will adjust the Equity Unlock Amount according to your property’s risk profile.
HomeLight partners with top agents nationwide to make buying and selling a home simpler, more certain, and satisfying for all. If your current home doesn’t sell within 90 days of the closing of your new home, HomeLight will buy the property and continue to work with you and your listing agent to sell it. Any profits from the sale, after deducting HomeLight’s incurred costs, will be distributed to the client.
You can use your Equity Unlock Amount for more than just a down payment on your new home. You can also use it for moving expenses, closing expenses, property repairs, and more! Contact us to find out more details.
Other ‘buy before you sell’ real estate companies
Along with HomeLight’s trusted and proven platform, there may be additional companies that provide Buy Before You Sell programs in your area. A few examples include:
- Knock: Knock’s Home Swap program assists homeowners with the complete buying and selling process, from helping clients locate and finance a new house, to covering preparation costs so clients can sell their old property for the best price.
- Orchard: Formerly known as Perch, Orchard provides a program called Move First that lets customers buy and settle into their new homes before they sell their old ones. The company promotes the process as the “modern way to buy.”
- Flyhomes: Flyhomes strives to help clients buy a home with less stress using their integrated mortgage and brokerage programs, such as their Cash Offers platform and Trade Up services, which are designed to help customers buy before they sell.
- Homeward: Homeward also offers a buy before you sell program advertised as “Move now, sell later.” The company works to provide a broader window to sell customer homes for the best price, along with an offer that gets homebuyers into a new home faster.
See company websites for specific program details, fees, and service locations.
Start your home-hunting journey with confidence
As you stand at the threshold of buying a new home while selling your current one, HomeLight’s Buy Before You Sell program can help you step forward with confidence and peace of mind.
“It helps you secure your dream home before someone else does without having to sell your current home first,” Marion summarizes. “You can possibly get a higher price for your home, or you might just want the peace of mind of knowing that you can move into your new home without the stress of selling your original home.”
The right strategy and support can transform the challenge of buying and selling simultaneously into an opportunity for a smoother and more rewarding transition.
At HomeLight, our commitment is to help make your real estate journey simple, certain, and satisfying. Whether you’re looking to buy before you sell or just want to consult with a top real estate agent in your city, we’re here to help
Header Image Source: (trongnguyen/ Depositphotos)
