Santa Clarita to Lancaster

Buying and selling at the same time: buy first, or sell first?

It depends on two things: whether the purchase needs the money from the sale, and whether you could carry both for a while if it came to that. Answer those and three others, and you get the likely order, what it costs you, and the case against it.

You will see where you stand before anyone asks you for anything. Angelica is a licensed agent working the Santa Clarita to Lancaster corridor.

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Norma Angelica Bermudez · CA DRE #02447380

Keller Williams Realty Antelope Valley · CA DRE #01378477

1401 W Rancho Vista Blvd, Suite B, Palmdale, CA 93551

The four ways to run a move-up

Sell first. You know exactly what you netted before you commit to anything, and your offer on the next home can be non-contingent, which is worth real money when a seller has choices. You need somewhere to be in between.
Buy first. You move once and take your time on the search. You carry both homes for a while, or use a bridge product with a fee attached. Either way the exposure is real and it has a number.
Concurrent close. Both escrows close the same day. Clean when it works, and it does work, but every deadline on either side becomes load-bearing: one slip moves both.
Stay put. Keep the rate, keep the assessed value, and put the money into the home you already own. A legitimate answer, and sometimes the right one.

How buying first is usually paid for

Buying before you sell means the down payment has to come from somewhere other than the sale. The usual sources, each with its own costs and qualification rules to verify with a lender:

Qualifying with both payments. If your income carries both mortgages, you can buy and sell on your own schedule. Many move-up buyers do not clear the debt-to-income limit with two payments, which is why the options below exist.
A home equity line of credit on the current home. It has to be open before you list, because many lenders will not open a line on a home that is already for sale.
A bridge loan. Short-term financing secured by the current home, repaid from the sale, with fees and interest for the time it is outstanding.
A buy-before-you-sell program. A company advances your equity, or commits to buy your current home as a backup, so you can make a non-contingent offer. Fees and terms vary widely between programs; compare the full cost, not the headline.

The contingent offer, and the rent-back

The other way to buy first is to make the purchase contingent on your sale. In California that is written into the offer with a contingency for the sale of your property. It costs nothing up front and it protects you, which is exactly why a seller with other offers tends to prefer one without it. It works best on a home that has been on the market a while, or when you have already accepted an offer on your own home.

Selling first has its own tool: stay in your home for a short time after closing under a seller-in-possession agreement, or a residential lease after sale for a longer stay. Either buys you a search window without owning two homes at once.

How a bridge loan works

A bridge loan is short-term financing secured by the home you already own. It gives you cash for the down payment on the next home before the first one sells, and it is repaid from the sale. You pay interest for the time it is outstanding plus the lender's fees, and you still have to qualify — lenders look at your equity and at whether you can carry the payments until the sale closes. Terms vary widely, so compare the full cost with a HELOC and a buy-before-you-sell program before you choose.

Buying before you sell in the Santa Clarita Valley

When the sale of your current home funds the next one, order matters most, and a contingent offer is at its weakest against sellers with other buyers. New construction adds its own twist: many builders won't take a home-sale contingency at all. Two local costs belong in the comparison before you choose: any Mello-Roos special tax on the next home, and the property tax reset to the new purchase price — unless you are 55 or older and can use Proposition 19.

More on each: new homes in Santa Clarita, what is Mello-Roos, and Prop 19 for movers.

What decides the order

Two questions settle most of it. Does the purchase need the money from the sale? And could you carry both homes for a while if the sale took longer than planned? The read at the top of this page asks both, along with three others, and returns the likely order, what it costs you, and the case against it.

Questions

What people ask about this

Can I buy a house before selling mine?

Yes, if the down payment can come from somewhere other than the sale: savings, a home equity line opened before you list, a bridge loan, or a buy-before-you-sell program. You also have to qualify with both payments unless the program or loan covers that. Each option has costs to verify with a lender.

What is a buy before you sell program?

A service that lets you buy your next home before your current one sells, usually by advancing your equity or committing to buy your current home as a backup, so your offer does not depend on your sale. Programs charge fees, and the terms vary, so compare the total cost.

Is it better to sell first or buy first?

Selling first gives you a certain number and a stronger offer, but you need somewhere to live in between. Buying first lets you move once, but you carry both homes or pay for a bridge. The right order depends on whether the purchase needs the sale's proceeds and whether you could carry both for a while.

How does a bridge loan work?

A bridge loan is short-term financing secured by your current home that pays for the down payment on the next one; it is repaid when your current home sells. You pay interest and fees while it is outstanding and must qualify with enough equity and income.

What is a home sale contingency?

A term in your purchase offer that makes the purchase depend on selling your current home. In California it is written into the offer as a contingency for the sale of the buyer's property. It protects you, which is why sellers with other offers tend to prefer offers without it.

Will a seller in Santa Clarita accept a contingent offer?

Some will, particularly on homes that have been on the market for a while, or when your own home is already in escrow. When a seller has several offers, a contingent one is usually the weakest of them.

Can I get a HELOC while my house is for sale?

Usually not. Many lenders will not open a home equity line on a home that is listed, so if you plan to use one for the next down payment, open it before you list.