Buy First or Sell First?

6 Strategies for Buying a New Home When You Already Own One

Buying your next home in Orange County when you already own a home can be dizzying. Whether you’re upsizing, downsizing, or relocating, it’s often one of the most complex real estate moves you’ll ever make. One of the first questions our clients ask is:

Should I sell my current home first or buy my next home first?

There’s no one-size-fits-all answer, but there are proven strategies. Below, we break down the four most common paths for buying and selling a home in Orange County, along with two lesser-known options that work well in the right circumstances.

1. Buy First, Then Sell (Non-Contingent Purchase)

Definition: Purchase your next home without making it contingent on selling your current home. Then sell your current home after you’ve moved.

✅ Advantages:

You’re in a stronger negotiating position as a buyer. In Orange County, all things being equal, non-contingent offers typically beat contingent ones.
You can time the sale of your current home for optimal market conditions.

⚠️ Disadvantages:

You’ll need the cash to buy without selling.
Not everyone has the assets or income to support this strategy.
There’s a risk to carrying two homes and two payments at once.

2. Sell First, Then Buy (Non-Contingent Sale)

Definition: Sell your current home before buying your next one. This strategy often includes a short-term rent-back (typically up to two months).

✅ Advantages:

Once your current home is closed, or at least in escrow with contingencies removed, you’re in a much stronger position to negotiate on the next home.
You can maximize your sales price by avoiding the pressure to accept the first offer.

⚠️ Disadvantages:

If your dream home isn’t available right away, you may need temporary housing or a short-term rental—aka the dreaded “double move.”

3. Sell Contingent on Finding a Replacement Property

Definition: List and sell your current home with a contingency clause stating the sale is dependent on you securing your next home.

✅ Advantages:

You stay in control: you only move if you find the right home.
It lets you test the market and get a clearer picture of your available equity.

⚠️ Disadvantages:

Orange County buyers may hesitate to wait around for you to find your next home.
Your buyer may not begin inspections until you’ve identified and secured your next property.
Your offer on your next home won’t be as competitive as one from a buyer with closed escrow or removed contingencies.

4. Buy Contingent on Selling Your Current Home

Definition: Make an offer on your next home that is contingent on selling your current home—even though you haven’t yet found a buyer.

✅ Advantages:

Offers peace of mind: you’ve found your next home before letting go of your current one.

⚠️ Disadvantages:

Contingent offers are often seen as the weakest in competitive Orange County markets.
Sellers may demand a higher price to accept your offer, or reject it entirely.
Your options will be limited, especially if sellers need a fast or guaranteed close.

Two Less-Common (But Effective) Alternatives

5. Use a Bridge Loan or HELOC to Buy Before You Sell

Definition: Leverage a bridge loan or Home Equity Line of Credit (HELOC) to fund the down payment or full purchase of your next home, then pay it off after selling your current home.

✅ Advantages:

You can make a non-contingent offer while still using the equity in your current home.
It gives you the flexibility to sell on your own timeline.

⚠️ Disadvantages:

Bridge loans have additional fees and higher interest rates.
They’re designed to be temporary and refinanced, so the math has to make sense.
You still carry the risk of owning two homes, even if only for a short time.

6. Rent Out Your Current Home to Help Qualify for the Next One

Definition: Turn your current home into a rental and use projected rental income to help qualify for your next mortgage.

✅ Advantages:

Some lenders allow you to factor in potential rent when determining your borrowing power, especially helpful if your current mortgage has a low interest rate.
It can be a great option if the rental market is hot but the sales market is slower.

⚠️ Disadvantages:

You become a landlord, even if only temporarily.
Not all lenders will count projected rent unless you have a signed lease.
You’ll still need sufficient cash or financing for your next home’s down payment without tapping the equity in your current home.

Which Strategy Is Right for You?

The best approach depends on your finances, goals, and market timing. We help clients weigh the pros and cons of each strategy, connect with lenders who offer specialty financing, and create a tailored plan that makes moving less stressful.

📞 Ready to talk through your options? Contact us for a pressure-free consultation.