How to Buy a House Contingent on Selling Yours: 4 Paths to Success

How does a home sale contingency work?

If you fall in love with a home prior to selling yours, your real estate agent can add a contingency clause to the terms of the offer. This clause will protect you from moving forward with the purchase before your current home sells, and it can go one of three ways:

1. You find a buyer for your home, and your contract for the new home moves forward as planned.
2. You don’t find a home buyer in the specified timeframe (usually 30-60 days), and the contract for buying the new home is voided. When this happens, you typically will get back any earnest money you put down on the house and will be able to start the search over again.
3. In the event of a “kick-out clause,” another buyer makes an offer on the home that the seller is interested in accepting. According to R.C. Shea and Associates, a kick-out clause is an addendum that gives a seller the ability to keep their home on the market while you try to sell your house. If they find a new buyer, they’ll give you 72 hours (on average) to either move forward with the home purchase or drop out.

How common is a home sale contingency?

With over half of all buyers being the owners of their previous residences, the process of buying a house that is contingent on selling yours is an everyday obstacle for buyers, sellers, and their agents. And yet, with only 6% of contracts terminated in the third quarter of 2024, it’s certainly not an obstacle that is insurmountable — especially with a bit of planning and an experienced real estate agent by your side.

4 ways to buy a house contingent on selling yours

How you move forward in the process will depend on where you are now. Let’s explore the four most common scenarios so that you can put your plan into place.

Choose your own adventure by picking the path that best represents where you are now in the process:

• Your home is under contract, and you’re looking for your next dream home (Proceed to Scenario A)
• Your home is on the market, and you’re looking for your next dream home (Proceed to Scenario B)
• Your home is on the market, and you’ve found your next dream home (Proceed to Scenario C)
• Your home isn’t on the market, but you’ve found your next dream home (Proceed to Scenario D)

Scenario A: Your home is under contract, and you’re looking for your next dream home

With moving day imminent, your focus is two-fold: make sure your home is packed and ready to go before the closing date and find your new home.

If you’re already this far along in the process, you probably have a good idea about where you want to move and what your motivations are. According to the NAR, top reasons for purchasing a home included a desire to be a homeowner and to be located closer to friends and family.

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With your real estate agent’s help, the answers to the above questions can help narrow down your list of potential neighborhoods that you’ll want to target in your search. But just because a neighborhood checks all of your boxes on paper doesn’t mean it’s the right choice for you and your family. Here are a few online tools that can help take your research even further.

AreaVibes
Investigate the area’s crime statistics, as well as stats on other key factors, such as the area’s amenities, cost of living, education, housing, and weather. When you search for a particular city, neighborhood, or address, you’ll see how it scores in each of the key metrics, as well as how it compares to both surrounding communities and the country as a whole.

WalkScore
If living in an area where you can walk to the neighborhood coffee shop or grocery store is important to you, then you’ll want to check out this tool. Just type in an address, and you’ll see how walkable and bikeable the area is — as well as how close you are to schools, restaurants, shops, and other points of interest.

Google Street View
Take a virtual drive through a neighborhood to get a feel for the area, as well as the age and condition of homes, their proximity to each other, and what the traffic situation might look like. Simply type in an address and drop the “street view” icon on the map to start exploring.

GreatSchools
The quality of schools in a community has a big impact on property values and is, therefore, an important metric to consider — even if you don’t have children. GreatSchools pulls together school ratings and information for schools across the country and will compare schools within each state.

CityData.com
This site collects and analyzes data from a wide range of government and private sources to create profiles of every city and state in the country. Type in the name of the city you’re interested in learning about to get stats on the area’s demographics, income, house values, property taxes, crime levels, weather, and more.

Once you’ve identified a few neighborhoods that meet your criteria, it’s time to start house hunting. In a perfect world, your dream home will go on the market in one of these areas as soon as you start your search.

If that doesn’t happen, however, or the competition in that area is so steep that houses are getting scooped up quickly, Andy Peters, one of the top-performing real estate agents in Atlanta, Georgia, has an unorthodox plan he used for buyers who needed to find a new home fast.

“We sent out mailers to the neighborhood they wanted to live in,” Peters said. “It was a very simple mailer, one-pager with a picture of the client — in this case, a family of four with their dog — and we told their story.”

The strategy worked. A seller in that neighborhood had just met with an agent and planned to list their house in the next 30 days. They ended up selling their home to Peters’ clients before the house ever hit the market.

If you’re struggling to find the perfect home for you and your family, don’t despair, and (just as importantly) don’t settle. It may not be your preferred option, but you could consider a short-term rental as you search for your new home.

Scenario B: Your home is on the market, and you’re looking for your next dream home

While some markets are cooling a bit, the country is still tipped in favor of sellers overall due to tight inventory and an ongoing housing shortage, so it’s likely you will still be in a fairly good position to sell your current home. However, you might find yourself in a tough position when looking to buy another one. Having an experienced real estate agent on your side who can help with this process will be key.

Navigating the buying and selling processes at the same time can be overwhelming, as your focus will be split in two very different directions. Unless luck is on your side, it’s also very likely that one process will be completed before the other.

If your home goes under contract first, go back to Scenario A. 

If you find your new home first, proceed to Scenario C. 

Scenario C: Your home is on the market, and you’ve found your next dream home

In this scenario, you must focus on selling your current home while preparing the best offer for your next home.

To ensure the fastest sale possible, reduce the obstacles between your home and potential buyers. Instead, try out these strategies:

• Use a top agent’s advice to price the house for the market. Ask them to show you comparable home sales in the area over the last few months for houses that are similar in size and features to yours. A comparative market analysis (CMA) will help you better understand how to price your home based on the current real estate market.
• Address repairs to avoid buyer hesitation. The biggest things to assess are health and safety issues, such as the house’s structural condition, the existence of harmful substances such as mold or asbestos, and anything not up to code. Using a home inspector can be helpful with this process.
• Don’t skimp on staging. According to HomeLight’s most recent Top Agent Insights Survey, 67% of agents say staging helps sell homes, while 31% believe it’s essential for a sale. While professional home staging costs between $1,500 and $4,000 on average, agents report that a professionally staged home can sell for as much as 13% more than an unstaged home.
• Use only the highest-quality images for the online listing. With 100% of home buyers using the internet to search for available properties, hiring a real estate photographer to take professional shots of your property can be a worthwhile investment. A 360-degree virtual walkthrough or video tour can help your property stand out, as well.
• Prepare to move quickly. As you stage your home, all of your personal effects should already be packed away. To make the process of moving out (and into your new home) as easy as possible, transfer all of those boxes to the basement, attic, or storage facility while your home is on the market.

Now it’s time to focus on that offer for the new house.

Competition is inevitable and something you can’t control. What you can control is making your offer as attractive as possible.

Here are a few tips that can help:

• Offer a higher price than your competitor. The average home sold for 100% of the listing price, and 25% of buyers purchased their home over-asking. Work with your agent to present the most attractive offer possible. If you’re financing the home purchase, understand that if the lender-required home appraisal comes in lower than your offer price, you will have to fork over the difference in cash or back out of the deal.
• Let the seller stay a while longer. According to Peters, there are offer terms that can mean more than money. “Terms that would be interesting to me would be if a buyer was willing to give the seller possession after the close,” he said. “In other words, the seller has a week or two to get out of the house when they’re living rent-free.”
• Consider using a bridge loan. Rather than relying on the sale of your home to fund your new purchase, this short-term solution can be taken out against your current home until a buyer is found.
• Include your current home’s list price with the offer. If you’ve priced your home appropriately (or aggressively), this shows the sellers you’re serious about selling your home.
• Make it personal. Never underestimate the power of sentimentality, even in a business transaction, as Peters showed in Scenario A. With this in mind, include a handwritten, personal note about what makes this property a dream home for you and your family. (Note that buyer love letters are illegal in some states because they can lead to fair housing violations.)

This combination of strategies for selling your current home while making an offer on your next home will put you on the best path to success.

Scenario D: Your home isn’t on the market, but you’ve found your next dream home

Simply put: get your home on the market.

According to the NAR Realtors Confidence Index Survey, houses were on the market for an average of 28 days in September 2024 — up from 21 days during the same period the year before. That’s a relatively short amount of time, and the process can feel quite rushed.

After your offer on your new home is accepted, you have a lot to do: make necessary repairs and cosmetic updates to your current house, list it, manage showings, review offers, enter into a contract, and close the deal. During this time, there’s a significant risk that your contingent offer could expire or the sellers might find another buyer.

This assumes that a seller would accept a contingent offer from a buyer whose home has yet to be listed. Peters, for one, would not.

“If you had somebody come to the table and their house isn’t even listed, and they want to buy a listing, I am very trigger-shy doing that,” he said. “They have to show some motivation that they’re on the market, and they’re making a conscious effort.”

When you’re ready to put your home on the market, proceed to Scenario C, or consider a whole new scenario below.

Other ways to sell your existing home and buy a new one

If you are a homeowner in scenarios B, C, or D above, there are also convenient trade-in or “buy before you sell” options that can significantly reduce the stress of buying and selling at the same time.

For example, with a service like HomeLight Buy Before You Sell, you can unlock a percentage of your home’s equity to make a competitive all-cash offer on your dream home. You won’t have to include a home sale contingency in your offer, and you can sell your current home vacant, which means you won’t have to deal with the hassle of moving twice.

Other examples of “buy before you sell” or “trade-in” services include Orchard Move First, Flyhomes, and Homeward. These companies look for homes in good condition and tend to make cash offers closer to market value.

Bottom line? Rely on a top agent’s expertise to guide your journey

The process of buying or selling a home can be challenging enough — but when trying to do both at the same time, getting it right can seem downright daunting. Especially in today’s competitive and shifting market, having a top real estate agent on your side will be critical to navigating the twists and turns of any home sale contingency scenario.

Whatever path you currently find yourself on, the next step in your adventure should be to consult a real estate agent who can guide you through the process. All it takes is two minutes and we’ll help match you with the best real estate agents in your area.

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