The four ways to sequence a sale and a purchase
| Plan | How it works | Main risk | Cost to plan for |
|---|---|---|---|
| Sell first | List and close on your sale, then buy. You may need a place to stay in between | You might have to rent or stay with family, and you can lose a house you like | Temporary housing, storage and a second move; see moving and storage costs |
| Sell first with a rent-back | The buyer lets you stay in your old house for a short time after closing | The buyer's lender may limit it; sets terms you must follow | Per-day rent; see rent-back after sale |
| Buy first | Buy the new house using savings, a HELOC or a bridge loan, then sell the old one | You may own two houses; carrying costs run until the sale | Interest and fees; see bridge loans |
| Contingent offer | Your purchase offer depends on your sale (or the sale of your house depends on your purchase) | A seller may choose a competing offer without it | Little cash, but a weaker offer |
| Same-day closings | You close the sale and the purchase on one day, back to back | A delay or wire problem at one closing affects the other | Possible rent-back days or a short bridge |
There is no single best way. The right one depends on how much cash you have, how fast homes sell in your town (see how long it takes to sell), and how much risk you can accept.
The Massachusetts steps and timeline
Mass.gov lays out the buyer's side like this: you make an offer, which is a legally binding contract; then you sign a purchase and sale agreement (P&S) prepared by the buyer's and seller's attorneys; the lender issues disclosures including the Loan Estimate within three days of an application; the lender sends a "clear to close"; and you schedule a closing. The state advises hiring an attorney before signing any contract.
The mass.gov outline of what a P&S covers lists the date and time of closing and a "time is of the essence" clause, which generally means the date is firm. It also covers possession at closing, an extension to fix title problems, and the use of closing money to clear title. See the state's P&S outline and our P&S guide.
Closing dates are negotiated. As local practice, many Massachusetts closings are set about 30 to 45 days after the P&S is signed, but we could not find an official standard, and cash buyers can close faster. For your sale, the date goes in the P&S with your buyer. For your purchase, it goes in your own P&S. Make the two dates work together before you sign either.
Mortgage contingencies and your two contracts
The state says a P&S may include contingencies such as a home inspection, lead paint inspection, zoning, financing or others. A financing (mortgage) contingency lets a buyer back out if they cannot get a loan by a set date. Watch for this in both directions:
- On your sale: If your buyer has a mortgage contingency, your sale is not final until the buyer's loan is approved. Do not sign your purchase contract in a way that depends on a sale you do not yet have certainty on, unless it includes a contingency of your own.
- On your purchase: Ask your attorney whether to include a contingency for the sale of your home, and how long you have to remove it. A seller may find it less attractive than an offer without one.
- Your own lender: Ask your lender in writing how it will count your old mortgage payment in your debt-to-income ratio before the old house closes, and what proof (such as a signed sale contract) it needs.
Do not rely on any of this without your attorney reading both contracts together. Missed dates in a P&S can put your deposit at risk.
Closing on the same day
Two closings in one day (often called back to back) let you use your sale money for your purchase with no gap in housing. Attorneys usually coordinate them. A few cautions:
- The buyer's wire for your sale has to arrive before your sale proceeds can be sent for your purchase. Ask your attorney whether proceeds can be available the same day, and have a backup.
- If either closing slips, so does the other. Ask for an agreement with your buyer allowing a short rent-back, or have a short bridge or HELOC ready.
- Tell your lender about the plan early, and ask in writing what proof of the sale proceeds it will accept.
Temporary housing, storage and rent-back
If you sell first, plan for a gap. Options include a short-term rental, staying with family, a storage unit, or asking the buyer for a rent-back that lets you stay a few days or weeks after closing. See rent-back after sale for terms. Moving twice costs more; see moving and storage costs.
If you are moving for work, see relocation. If you are moving because you are downsizing, see downsizing your home.
Checklist: line up the dates
| When | What to do |
|---|---|
| Before listing | Talk to a lender about what you can borrow, a HELOC, and how your old mortgage will count. Hire a real estate attorney. Get a net proceeds estimate in the calculator |
| Before you make an offer | Decide your plan (sell first, buy first, contingent or same day). Ask your attorney how to write the contingency or the closing date |
| When you sign your sale P&S | Pick a closing date and ask about a rent-back. Check the buyer's mortgage contingency date |
| When you sign your purchase P&S | Match the two closing dates, or add a contingency. Know how much deposit is at risk |
| 2 to 3 weeks before closing | Order payoff statements for your mortgage and any HELOC. Confirm movers, storage and utilities |
| Closing week | Confirm wire timing, the final walk-through, keys, insurance on the new house, and your temporary housing |
| After closing | Confirm your discharge is recorded and keep the closing statements for tax records |
General information, not legal or financial advice. Your attorney should read both contracts and your lender's conditions.