Tim Lockhart profile image

By Tim Lockhart

Tim is a 6th generation Texan, grew up in Arlington TX, and after having served 20 years as an Air Force Civil Engineering officer and managing over $1 Billion in facility construction and renovation projects, he retired in 2013. The experience, work ethic and leadership gained in the Air Force propelled him in only 4 years to build a real estate business ranking in the top 5% of agents worldwide in Keller Williams Realty the #1 Real Estate Company in the World. Tim is a Certified Military Relocation Specialist providing the highest level of service to his clients.

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Selling your current home before buying a new one is the conventional way to move. However, depending on your situation, there will be times when buying before you sell is the better option. Whatever your reason, you should know that buying first comes with additional risks, such as paying two mortgages, if your current home takes a long time to sell.

If you’re in a situation where you must buy first before selling, don’t worry. It’s not impossible, but it takes some strategic planning to make it happen. Here are three things that will help you buy before you sell:

1. Use a home equity line of credit. A home equity line of credit, or HELOC, is a second mortgage that allows you to borrow cash based on the value of your home. In other words, it allows you to use your equity without selling your home. While lenders vary on how much they’ll let you borrow, 80% of your equity is industry standard. If you choose this option, you’ll need to act fast. Getting approved for a HELOC often takes longer than a traditional mortgage approval, so you should have it in place before applying for the mortgage on your new home. Once you have moved into your new property, you can put your old one up for sale at your leisure and pay back your HELOC using the profits.

“You need to move fast in our competitive spring housing market.”

2. Finance with a bridge loan. A bridge loan is a short-term, high-interest loan. When you buy with a bridge loan, you can use your existing home as collateral to get a loan for your new house. To close your bridge loan faster, try to align the closing dates of your buying and selling transactions.

3. Use a service that will help you make a cash offer. As a member of the Keller Williams network of offices, my clients have access to a very unique program provided by Homeward where they can buy and move into their new home first, then have a stress-free selling process of their current home. Put simply, they approve you for a certain amount based on the equity and value of your current home. Then, they’ll purchase your new home for you using an all-cash offer using the approved funds. From there, you can move into your new house, sell your old one at your leisure, and then purchase your new home back from the company using the profits from your sale. The main advantage of using this option is that you can make an all-cash offer, which could make your offer more attractive in this market. However, there are service and interest fees you’ll need to consider.

Buying a new home before selling your existing one has its unique challenges, but if you can leverage the three options above and utilize the guidance of an experienced agent, you can come up with the best solutions for your situation. If you want more details about this topic or have any real estate concerns, don’t hesitate to call or email me. I’ll be happy to help.