Bridge Loans, Contingencies & Timing: What You Must Know to Buy & Sell

Planning to sell your current home and buy a new one can be an exciting but complex process. The good news is that there are several strategic ways to manage the transition smoothly. Each method comes with its own pros and cons, depending on your timeline, financial situation, and local housing market conditions.

Here are 4 strategies to consider when navigating the buy-sell real estate process:

Strategy #1: Buy First, Sell Second

This approach is ideal for families with pets, children, or health concerns who need a stable living environment throughout the move. It allows you to fully transition into the new home before dealing with showings, open houses, and the final sale of your old one.

How it works:

• A) Bridge Loan
  A short-term loan (usually 6–12 months) that helps cover the down payment or full purchase of a new home before selling your current one. This is ideal when you expect to sell your old home quickly but need to move right away.
  🔗 Source: Investopedia – Bridge Loan

• B) Home Equity Loan or HELOC
  If you’ve built up significant equity in your current home, you may qualify for a home equity loan or home equity line of credit (HELOC) to fund the purchase of your next home. After selling, you can use the proceeds to repay the loan.
  🔗 Source: Consumer Financial Protection Bureau – Home Equity Loan Basics

Best For: Sellers with strong equity, stable finances, or a need for more control over the moving timeline.

Strategy #2: Simultaneous Buy/Sell

This is a popular option for those who want to coordinate both transactions at the same time—sell their current home while simultaneously buying a new one.

Two common approaches:

• A) Contingent Offer
  You make an offer on a new home contingent on selling your current home, typically within 30–60 days. While these offers are more complex, they are often accepted when the seller’s home has been on the market for a few weeks and demand is moderate.
  🔗 Source: National Association of REALTORS® – Real Estate Contingencies

  ⚠️ Note: Contingent offers usually don’t perform well in competitive markets with bidding wars, where cash or non-contingent offers are preferred.

• B) List First, Then Buy
  Another option is to list your home before shopping for a new one. This works best in spring and summer, when housing inventory is typically higher, giving you more options to choose from. However, it carries the risk of your home selling before you’ve secured your next property—potentially leaving you in temporary housing or feeling rushed.
  🔗 Source: Zillow – Timing a Move

Best For: Sellers in balanced markets with flexibility on timing and logistics.

Strategy #3: Sell Now, Wait to Buy

This strategy is often used by sellers who want to “sell high” and wait for the market to cool before reentering as buyers.

Why use it:
If home prices are peaking, some homeowners choose to cash out at top dollar and rent temporarily or stay with family while watching for market corrections.

Risk Factor:
This approach involves market speculation. If home values continue rising, you may find yourself priced out of the market later. Additionally, renting or moving twice can add unexpected costs.
🔗 Source: Freddie Mac – Timing the Market

Best For: Those with flexibility, temporary housing options, and a strong understanding of local market trends.

Have Questions About Real Estate? Let’s Talk!

Whether you’re upsizing, downsizing, or relocating across town, choosing the right buy-sell strategy can significantly impact your financial outcome and stress level. Every situation is unique, and the best plan is one that aligns with your financial readiness, housing needs, and local market conditions.

📞 Reach out anytime if you’d like help creating a tailored plan that fits your situation.

References

1. Investopedia. (2024). Bridge Loan Definition. https://www.investopedia.com/terms/b/bridgeloan.asp

2. Consumer Financial Protection Bureau. (2024). Home Equity Loans and HELOCs. https://www.consumerfinance.gov/ask-cfpb/

3. National Association of REALTORS®. (2023). Real Estate Contingencies Explained. https://www.nar.realtor/

4. Zillow. (2024). Seller’s Guide to Timing a Move. https://www.zillow.com/sellers-guide/

5. Freddie Mac. (2023). Why Timing the Market is Risky. https://www.freddiemac.com/blog/homeownership/20211220_timing_the_market