The couple talked to a lender about getting a bridge loan that would have helped them handle the finances associated with two mortgages for a short period, if necessary. In a bridge loan, a lender gives homebuyers a short-term loan based on the equity in their existing home that allows the buyers to make a down payment before completing the sale of their existing house. They lender relies on buyers being able to pay off the bridge loan once they've sold their house.
While bridge loans allow buyers some more breathing room while buying and selling, they have some drawbacks as well. They typically carry higher interest rates than other types of loans, and borrowers may end up carrying more debt than they planned if it takes longer than expected to sell their homes.
Ultimately, the Ondillas decided they were uncomfortable with that type of financial commitment. Instead, they wrote contingencies into the offers they made on other homes, nullifying the deal if they couldn't find a buyer for their home.
“At first, that just put us out of the running," says Samantha. “People were just like, 'No, sorry.'"
Ultimately, however, the Ondillas accepted an offer on their home and found a buyer who would accept their contingency offer. They managed to arrange the closings on both homes on the very same day. To make matters even more complicated, the buyers of the Ondillas’ home also needed to sell their home the same day in order to complete that transaction.
“I was nervous, but I was optimistic that everything would go well," Ondilla says, “and it did work out."
As the Ondillas learned, buying a new home becomes far more complicated when you also have one to sell. Since most people own one home at a time, attempting to buy a property while selling another is fairly common. If you're able to line up your home sale and purchase perfectly, you'll be able to roll over the equity of your home into your down payment. Last year, more than 70% of sellers were also trying to purchase a home, according to Zillow.
That doesn't make it easy, especially in today's tight real estate market where sellers have less incentive to work with buyers. With some advance planning, however, it's possible to make it work. “You just have to be organized and really follow the timelines that your Realtor sets," says Sam DeBianchi, founder of Sam DeBianchi Real Estate in Fort Lauderdale, Fla.
Here are some more tips to keep in mind: