5 Ways to Buy a New Home Before Your Current One Sells

By Ron and Tammy

The Wexler Group is a Chicago-area real estate leader with over 3,100 closed home sales and a reputation for delivering a consistent 5-Star experience by staying ahead of market trends so clients always come out ahead.

On the stress scale, a major move ranks right up there with some of life’s biggest challenges. There’s almost nothing more frustrating than finding the perfect home and not being able to buy it because yours hasn’t sold yet. Right now, inventory across the country is still about 20% below its peak, which means more buyers are competing for fewer homes. That makes it very difficult to get a seller to accept an offer with a contingency on your home selling first.

The reality is, there are more ways to make this work than most people realize. In this video, we break down five strategies we use with our clients to help them secure their next home without waiting. From bridge loans and retirement fund options to a leaseback arrangement that recently helped one of our buyers avoid carrying two properties at the same time, we cover real options and how to determine which one fits your situation.

You can watch the full video above, or feel free to skip to the topics that interest you most using the timestamps below:

00:00 — Buying Before Selling
00:38 — Why Contingencies Struggle
01:13 — Bridge Loans and Asset-Based Lending
02:40 — Home Equity
03:34 — Retirement Funds, Loans, and Withdrawals
05:03 — Buy-Before-You-Sell Programs
06:08 — Sale-Leaseback Strategy
07:26 — Borrowing From Family
09:06 — Don’t Wait

Key takeaways:

Bridge loans are one of the simplest options. If you have significant equity in your current home, you can pull it out, use it to purchase your next home, move on your own terms, and then sell your current home and pay off the equity loan. Ron walks through a specific example: a $300,000 home with a $100,000 mortgage gives you $150,000 to $200,000 in accessible equity to put toward your next purchase.

A loan against retirement funds works differently from a withdrawal. You can borrow against a 401(k) and pay it back without penalties, but actually pulling money out gives you a limited window to return it before taxes and penalties kick in. Timing matters here, and your tax advisor is the best person to help you compare the cost of interest on a loan versus the risk of penalties on a withdrawal.

Sale-leaseback arrangements can solve the two-property problem. We recently helped a buyer close on their purchase, then let the seller stay in the home for 90 days while the seller covered the mortgage, taxes, and insurance. Our clients didn’t carry any extra monthly cost, had time to prepare their current home for sale, and their home sold within about a week of going on the market.

Borrowing from family can turn you into a cash buyer. In a recent family transaction, a relative loaned the purchase funds at 5% interest, which was better than the 3% they were earning in the bank. The buyer closed as a cash buyer, beat out competing offers, then got a traditional mortgage afterward and paid the relative back.

Waiting can cost more than acting. Think about the last 10 years of our market. How much equity would you have lost by waiting a year or two to figure out the perfect timing? Making the move now means more years of equity growth and more years enjoying your new home.

Every situation is different, and the smartest thing you can do is sit down with someone who has been through this before and can walk you through all the options. That’s exactly what we do. Reach out to us at 708-629-5151 or email ron@thewexlergroup.com. You can also visit thewexlergroup.com to learn more about how we help buyers and sellers across Chicagoland and Northwest Indiana. We’re here to help any way we can.