This means simply you have a house to sell and that you cannot buy another until you have sold yours.  Or in other words; you are making an offer to a seller subject to the sale of your home.

This I the least desirable situation you can be in as a buyer.  It gives you little or no negotiation room and offers you little or no clout as a buyer.  Many sellers will not even consider contingent offers because they do not want to remove their home from the market while they wait in anticipation of your home selling.  After all, they do not know what condition your home is in, whether it is priced to sell, or if it is in a desirable location – all key factors when selling a home.

Procedure for buying contingent

If you must sell your home in order to purchase a home, and the majority of home buyers must do exactly that, it is important that your home is already on the market, and even better that you have a pending offer on it.  Remember, it is much easier to find the home of your choice than to sell yours.  It is simple mathematics.  You are offering one style, one property and you must find a buyer who wants exactly what you are offering.  On the other hand, you are able to view many styles and properties, from which you can choose which one is exactly right for you.

The other advantage is the closing date.  Once yours has a pending offer, you know your closing date.  So when you find your dream home, you simply set the closing date for the following day or two and you will be able to cover your closing costs and down payment from the sale of your home, eliminating the need for a bridge loan.  Remember, you must have the cash at your closing – cash that is coming from the sale of your home.

Process for selling your home first

Bridge loans – what are they and how do they work?

The other option that may be available to you is a bridge loan.  This is a tool used every day by contingent buyers.  They are simple, easy, and cost you absolutely nothing unless you execute them.  They can protect you in the event another buyer tries to ‘bump you out’.  They basically loan you money against your equity to cover the closing costs of your new purchase until your home sells.  Then you reimburse the lender with proceeds from your sale.  Ask your real estate agent for a list of lenders that offer bridge loans if you are interested in one.  There are certain criteria that need to be met, but they are a valuable and inexpensive option for you.  If you will be a contingent buyer, let’s talk about this option so you will be prepared.