When you own a home and want to move, you have four main routes: sell first, buy first with bridge financing, make a purchase offer conditional on selling your home, or line up both closings on the same day. Bridge financing is a short-term loan secured on your current home's equity and usually costs more than a regular mortgage, so confirm the rate, fees and requirements with your lender before you bid.
What are my options if I need to sell and buy?
- Sell first, then buy. No overlap and no dual carrying costs. The trade-off is you may need temporary housing, or a longer closing or rent-back on your sale.
- Buy first with bridge financing. You close on the new home before your sale closes, and a short-term bridge loan covers the gap.
- Conditional offer. You make your purchase conditional on selling your current home. This protects you, but sellers often prefer offers without conditions, especially when buyers are competing.
- Same-day or aligned closings. Your sale and purchase close on the same day or within a day or two, coordinated by your lawyer. It works, but one delay can affect both deals.
How does bridge financing work?
A bridge loan is a short-term loan that covers the gap between the closing date of the home you are buying and the closing date of the home you are selling. It is typically secured against the equity in your current home and repaid from the sale proceeds when that sale closes.
- Lenders often require a firm, unconditional sale agreement on your current home before they will approve a bridge, so ask what yours requires.
- Bridge loans generally cost more than a standard mortgage, through a higher interest rate and often a fee. Get the rate, fees and term in writing.
- Your lender may also look at whether you can carry both homes for a short period.
How do I choose between the options?
| Route | Main benefit | Main risk |
|---|---|---|
| Sell first | Know your budget; no overlap | Temporary housing; moving twice |
| Buy first with bridge | Strong offers; no rush on your sale | Carrying two homes; bridge cost |
| Conditional on sale | Protected if your home does not sell | Weaker offer in competitive situations |
| Aligned closings | Minimal overlap | A delay on one side affects the other |
Which one fits depends on how much cash and equity you have, how long homes are taking to sell in your price range, and how much risk you can carry. The current market report shows months of supply and days on market by property type.
What should I do before I start looking?
- Talk to your lender or mortgage broker about whether you can carry two homes and what a bridge loan would cost.
- Get a realistic value and net-proceeds estimate for your current home. Request a home value.
- Decide your fallback: what you will do if your home sells before you find a purchase, or the reverse.
- Ask your real estate lawyer how to structure closing dates and any rent-back.
Related guides
General information, not legal, tax or financial advice. Rates, limits and rules change; confirm with your lawyer, lender or accountant.
Buying before you sell in Waterloo Region: frequently asked questions
A short-term loan that covers the gap between closing on a new home and closing on the sale of your current home, usually secured against your current home's equity.
It depends on your cash, equity and risk tolerance. Selling first removes the dual-carrying risk; buying first or using a conditional offer gives more flexibility but more exposure.
Yes, a conditional-on-sale offer is allowed. Sellers may prefer unconditional offers, so it can weaken your position when there is competition.
Many lenders do require a firm, unconditional sale agreement on your current home. Requirements vary, so ask your lender.
Questions about your situation?
Mario gives straight answers on buying, selling and investing across Kitchener, Waterloo and Cambridge.