Can I Buy a New Home Before My Current Home Sells in Algonquin, IL?

Can you buy a new home before your current home sells in Algonquin, IL? Yes, you can, but it only works safely in a few situations, and for most sellers I still recommend selling first.

Laurie Arslani is a REALTOR® with eXp Realty in Barrington, IL helping sellers price, prepare and sell with a plan. I work with sellers across Algonquin, Barrington, Lake in the Hills, Huntley and Crystal Lake. When a seller asks me this question, they are usually worried about one of two things. They are afraid of owning two homes at once, or afraid of losing a home they love while they wait for their own to sell.

Both worries are fair. Here is how I think through it with my clients, so you can decide whether buying first is right for you.

It means you close on your next home while you still own your current one. For a while, you own two homes.

That is the part that scares people, and it should get your attention. Owning two homes means you need a way to pay for the new one without the money from the old one. If you don't have that way in place, buying first is a risk you don't need to take.

I tell my clients the same thing every time: this is probably the biggest investment you will make in your life, so you owe it to yourself to take your time and think it through. I don't like rushed decisions. I would rather slow you down than hurry you into a purchase you can't comfortably carry.

I only tell clients to buy first when they do not need the proceeds from their current home to buy the next one. That usually comes down to one of two situations.

You can close with other funds. If you have money available to buy the next home, and you are willing to repay it when your current home sells, you can buy first. You can also shop for the new home without a home sale contingency hanging over the offer, which makes your offer stronger.

You have a bridge loan in place. A bridge loan is short-term financing that lets you use the equity in your current home to buy before you sell. It is paid off from the proceeds when your home sells. If you have the means for one, and you don't want to be rushed to sell, it can give you the room to move at your own pace.

Here is a real example of the first one. I had clients who borrowed the funds so they would not have to sell their house first. One of their parents loaned them the money to buy the new home. They moved into the new home first, then sold their old one, and repaid the loan when it sold. Because the money was there, they could shop without a home sale contingency and sell on their own schedule.

If you are thinking about using money from family, ask your lender and your attorney how a loan like that should be handled before you write an offer.

If neither of those is you, buying first is probably not the right move.

The biggest benefit is time. I had a couple who found a home they loved, and to get it, they would technically have needed to sell their current home first. Instead, they used a bridge loan, bought the new home, and moved over slowly.

They never felt rushed, and they did not have to pack up the whole house in one weekend. They also used a lot of their own furniture to stage the home they were selling, which worked out perfectly. When the sale closed, they paid off the bridge loan.

I tell that story in more detail in my article on making an offer when your home isn't under contract yet. How Do I Make an Offer on a Home If Mine Isn't Under Contract Yet in Barrington, IL?

If you need the money from your current home to buy the next one, sell first. That is the most important rule I follow.

When you need the proceeds, the sale has to happen first, and it has to happen early enough that the money is there when the purchase closes. I handle that by scheduling the closings at different times on the same day. The sale goes first, and I leave time for the wire to reach the second closing. I have closed numerous same-day double closings for my clients this way, and it takes the pressure off.

You can read the whole process in my article on whether to sell first or buy first. Should I Sell My House First or Buy First in Huntley, IL?

Ask yourself these questions before you write an offer.

Do I need the money from my current home to buy the next one? If yes, sell first. If no, buying first is possible.

Can I close with other funds, and repay them when my home sells? If you can, the offer can go in clean, with no home sale contingency.

Do I have a bridge loan in place, or can I get one? Each lender sets its own rules, so ask yours. Good questions to start with:

• How much equity do I need in my current home?
• How long is the loan term?
• What is the interest rate, and how do payments work while I own both homes?
• Do I have to qualify while carrying both homes, or can my current mortgage payment be left out?
• What happens if my home takes longer to sell than expected?

Am I comfortable not being rushed to sell? The whole point of buying first is time. If you would be stressed about two homes, that is worth taking seriously.

If you are not sure about any of these, call me before you write an offer. We will go through your numbers and your timeline together.

Sometimes a client has to write the offer with a home sale or home close contingency. That is always an option, but it can be harder to get accepted, because most sellers prefer an offer that doesn't depend on anything else.

Whether it works depends on the market. When homes are selling fast, sellers often won't accept one. When the market is more balanced, they often will.

If it is a hot property at a good price that you really want, I don't advise writing it with a contingency. That is the time to line up other funds or a bridge loan, or to sell first.

Sometimes they don't. If you close on your sale and your next home isn't ready, or the other way around, I suggest a rent-back.

A rent-back means you close on your sale and stay in the home for an agreed number of days, paying the new owner while you are there. As a rule of thumb, I suggest setting the rent at the new owner's monthly housing payment, divided by the days in the month and multiplied by the days you stay. Your attorney writes up the final terms.

Buying first without a way to pay for it. If you need the proceeds from your current home, you are taking on more than you planned.

Writing a contingent offer on a house everyone wants. In a competitive situation, a clean offer usually wins.

Counting on a bridge loan before asking the lender. Each lender sets its own rules. Ask first, then plan.

Not telling the other agent your plan. The agent on the other side, and the buyers of your home, should both know how your timeline fits.

Rushing. A rushed decision on a house this size is almost never a good one.

Can I buy a new home before my current home sells in Algonquin, IL?
Yes, but it only works safely if you do not need the proceeds from your current home to buy the next one. You can close with other funds and repay them when your home sells, or use a bridge loan. Otherwise, I recommend selling first.

Do I need a bridge loan to buy before I sell in Huntley, IL?
Not always. A bridge loan is one way to buy first when you don't want to be rushed to sell. It lets you use the equity in your current home, and it is paid off from the proceeds when your home sells. Each lender sets its own rules, so check with yours first.

What if I buy a home in Barrington, IL and mine doesn't sell right away?
That is the risk of buying first, and it is why I only recommend it when you can carry the cost of both homes. If the dates don't line up, a rent-back is another tool. If you don't have a way to carry both, selling first is the safer plan.

Is it better to sell first or buy first in Lake in the Hills, IL?
For most sellers, sell first. You will know your proceeds and your timeline, and you can shop with a clear budget. I only recommend buying first if you can close on the next home with other funds or a bridge loan.

Can I close on the sale of my home and my next purchase on the same day in Crystal Lake, IL?
Yes. I have closed numerous same-day double closings for my clients. The sale closes first, the purchase closes later that day, and I build in time for the wire between the two.

If you are thinking about buying before you sell, call me before you write an offer. Tell me where you are now and where you want to be, and we will figure out the order together. You can see how I sell a home in Algonquin or read how I work first. Not sure yet? Read what my clients say on Google.

Laurie Arslani is a REALTOR® with eXp Realty in Barrington, IL helping sellers price, prepare and sell with a plan.

Phone: 847.804.9595
Website: lauriearslani.com