How Do You Buy a House Before You Sell Yours?

Andrew Whytock

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Andrew Whytock

June 10th, 2022
Updated June 10th, 2022

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Best services | How it works | Pros & cons | Costs

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🔑 Key takeaways:

  • If you use a buy-before-you-sell service, you can buy your new home and move before your old one sells.
  • Buy-before-you-sell programs solve two common problems: (1) they help people to avoid paying two mortgages at once, and (2) they make offers more competitive by turning them into all-cash offers.
  • Companies that provide these services qualify buyers by assessing the equity that they have in their current home.

With most buy-before-you-sell services, you can actually purchase and move into your new home before you sell your old one. This helps you to avoid paying two mortgages at once and removes any financing contingencies from your offer on a new house.

Buy-before-you-sell programs allow buyers to leverage the equity that they have in their current home to buy a new home. Typically, buy-before-you-sell services — also called trade-in services — use their cash to purchase your new home, and then you pay them back once your old home sells.

This effectively turns any offer that you make into a cash offer, which can be very appealing to sellers.

Some buy-before-you-sell services have their own agents, others require you to bring your own to the process. Looking for an expert you can trust? Clever can match you with top local agents for free!

Another option is selling to iBuyer, a company that provides a fast cash offer for your home. You would then have the cash you need to buy your next home. We recommend starting with Offerpad, a top iBuyer with great customer reviews.

Enter your ZIP code to see if you qualify for an instant cash offer from Offerpad. 👇

Best buy-before-you-sell services

1. Knock

Service Fee

1.25%

Closing Date Window

Varies

Average Rating

4.8/5 (710 reviews)

✍ Editor's Take
Pros & Cons
Locations
Reviews
Contact

Knock allows customers to purchase a new home before selling their old one. Unlike typical iBuyers, you'll sell on the open market with a traditional real estate agent. Knock will cover your old mortgage until your home sells — but you'll still eventually have to settle up, and costs can add up fast if your home sits on the market.

Pros

  • You'll sell on the open market, potentially receiving offers above fair market value
  • $25,000 advance for home repairs before selling
  • Compared to competitors, Knock accepts older homes (built after 1930)


Cons

  • Fees can add up quickly if your home sits on the market
  • You'll have multiple points of contact rather than one dedicated agent
  • Buyers will need to be proactive and independent in their home search

Knock is currently operating in 15 locations.

  • AZ: Phoenix
  • CO: Denver
  • FL: Fort Lauderdale, Jacksonville, Miami, Orlando, Tampa, West Palm Beach
  • GA: Atlanta
  • NC: Charlotte, Raleigh-Durham
  • TX: Austin, Dallas-Fort Worth, Houston, San Antonio

As of February 15, 2021, Knock's average customer rating is 4.8/5 based on 710 reviews.

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2. Orchard

Service Fee

6%

Closing Date Window

14–60 days

Average Rating

4.6/5 (97 reviews)

✍ Editor's Take
Pros & Cons
Locations
Reviews
Contact

Orchard is a home trade-in service that allows you to purchase a new home by getting access to your current home's equity. You can then list your old home on the market with an Orchard listing agent.

If you need to move quickly, but still want to get top dollar for your home, Orchard is worth considering. However, Orchard only accepts newer homes compared to its competitors.

Pros

  • You'll have a generous 7-day window to consider Orchard's offer
  • Use Orchard's Offer Boost program to make a cash offer on a new home
  • If your home doesn't sell in 120 days, you can accept Orchard's guaranteed cash offer


Cons

  • Homes must be relatively new, compared to competitors (built after 1972 vs. 1930-1960)
  • Orchard's cash offers will likely be much lower than what you'd be able to sell for on the open market

Orchard is currently operating in nine locations.

  • CO: Colorado Springs, Denver
  • GA: Atlanta
  • NC: Charlotte, Raleigh-Durham
  • TX: Austin, Dallas-Fort Worth, Houston, San Antonio

As of February 15, 2021, Orchard's average customer rating is 4.6/5 based on 97 reviews.

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3. Flyhomes

Flyhomes

Flyhomes

Full Review

Service Fee

1%

Closing Date Window

30 days

Average Rating

4.9 | 1016 reviews

✍ Editor's take
Pros & Cons
Locations
Reviews
Contact

Flyhomes' cash offer can help you avoid the hassle of moving twice and beat out bids in a competitive market. If you don't have a home to sell, you can use Flyhomes' cash offer for just buying. However, you'll end up paying a premium to use its services.

Pros

  • Don't pay two mortgages as the same time.
  • Move into your new home immediately.
  • 1% rebate if you use Flyhomes Mortgage.

Cons

  • Daily rental fees while you wait for your old home to sell.
  • Offer from Flyhomes is only a backup option, so it's not competitive.

Flyhomes is available in select cities in 6 states: CA, CO, MA, OK, TX, WA.

As of April 29, 2022, Flyhomes' weighted average is 4.9 based on 1016 reviews.

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4. Homeward

Service Fee

1.9% (0% if you use Homeward Mortgage)

Closing Date Window

45 days

Average Rating

4.7 | 500 reviews

✍️ Editor's Take
Pros & Cons
Locations
Reviews
Contact

With Homeward, you choose your own agent, giving you the possibility to work with a discount broker to save on commission. Homeward also offers more transparency than competitors about fees and other costs, has great customer reviews, and provides a solid backup offer if your trade-in home doesn’t sell within six months.

Pros

  • Choose your own agent
  • Transparent pricing
  • Positive customer reviews

Cons

  • Only available in Arizona, Colorado, Georgia, and Texas


Homeward offers home trade-in and cash offer services in only four states:

  • Arizona
  • Colorado
  • Georgia
  • Texas

As of April 29, 2022, Reali's weighted average is 4.7 based on 500 reviews.

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5. Opendoor

Opendoor Complete

Opendoor Complete

Full Review

Service Fee

5%

Closing Date Window

14–60 days

Average Rating

4.3 | 2718 reviews

✍ Editor's Take
Pros & Cons
Locations
Reviews
Contact

Opendoor Complete is the company's buy-before-you-sell service. At 5%, it's pricier than other home trade-in services. For example, Knock charges 1.25% plus $1,450. You'll also sell directly to Opendoor rather than on the open market, which might mean less money for you in the end.

Pros

  • Coordinate closing dates and avoid two mortgages
  • Can be used with FHA and VA loans
  • Opendoor can buy the home for you if your financing isn't ready

Cons

  • 5% service fee is more expensive than other trade-in services
  • Only available in markets where Opendoor buys homes
  • It might pay less than you would get on the open market
  • Not all homes will qualify


Opendoor is currently purchasing homes in 47 locations, including:

  • AZ: Phoenix, Tucson
  • CA: Los Angeles, Riverside, Sacramento, San Diego
  • CO: Denver
  • FL: Jacksonville, Orlando, Tampa
  • GA: Atlanta
  • MN: Minneapolis-St. Paul
  • NV: Las Vegas
  • NC: Asheville, Charlotte, Raleigh-Durham
  • OR: Portland
  • TN: Nashville
  • TX: Austin, Dallas-Fort Worth, Houston, San Antonio
  • UT: Salt Lake City

As of April 29, 2022, Opendoor's weighted average is 4.3 based on 2718 reviews.

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6. HomeLight

HomeLight Trade In

HomeLight Trade In

Company Website

Service Fee

3% (1% if you use its mortgage)

Closing Date Window

Average Rating

Not available

✍️ Editor's Take
Pros & Cons
Locations
Reviews
Contact

HomeLight is mainly an agent-matching service, but it also provides a buy-before-you-sell program. It charges 3% for the first 30 days it owns your home, then 1% each month thereafter (or 0.5% if you're in California or Colorado. You can choose your own agent, but they must be HomeLight certified.

Pros

  • Use your own agent
  • If your home sells for more than HomeLight paid, you get the additional cash
  • 3% service fee is reduced to 1% if you use HomeLight Home Loans

Cons

  • Not widely available

HomeLight's trade-in service operates in:

  • Arizona
  • California
  • Colorado
  • Florida
  • Texas

While there are plenty of reviews for the HomeLight matching service, we were unable to find any reviews specific to the trade-in program.

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7. Reali

Service Fee

1% (0.5% if you use its mortgage)

Closing Date Window

As little as 30 days

Average Rating

4.6 | 661 reviews

✍️ Editor's Take
Pros & Cons
Locations
Reviews
Contact

Reali likely won't be your best option for a buy-before-you-sell service, because it only operates in California and has numerous bad reviews from customers. Hidden fees could also cause you to pay more than you expected.

Pros

  • Service fee drops from 1% to 0.5% if you use Reali Loans

Cons

  • Many bad reviews
  • Hidden fees can add up
  • Only available in certain California markets

Reali Buy Before You Sell is only available for buyers and sellers in select markets in California:

  • San Francisco, CA
  • Sacramento, CA
  • Orange County, CA
  • Inland Empire, CA
  • Long Beach, CA
  • San Gabriel Valley, CA

As of April 29, 2022, Reali's weighted average is 4.6 based on 661 reviews.

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💵 How much does it cost to use a trade-in service?

Trade-in providers charge a fee, which they often call a service fee or convenience fee. The fee is usually a percentage of the old home's sale price. However, buyers and sellers usually still need to contribute to the closing costs that would be associated with a normal transaction.

Alternatively, you could work with a top-agent for a flat fee and save money when you sell your home.

How do buy-before-you-sell programs work?

The specifics of how each company organizes their trade-in service may differ, but when we spoke to trade-in companies, most told us they make a cash offer on a new home on your behalf.

  • To qualify for this service, you'll need to request an assessment. The cash amount that you qualify for typically depends on how much equity you have in your current home, so a trade-in might not be an option if you've only owned your current home for a short period of time.
  • Once the cash offer is accepted, the trade-in provider purchases the new home on your behalf, and you can move in.
  • Next, the trade-in service lists your old home for sale. If the company sells that house, they'll pass the profits along to you, minus whatever cash they fronted for your new home and any applicable fees.

Some trade-in services have their own in-house mortgage options that you're required to use in order to qualify while others let you shop around to find the best possible rate.

If the trade-in company doesn't sell your house, they will usually buy it from you for an amount that you agreed to at the start of your transaction.

This backup offer is generally less than what you'd get on the open market, but it does give you the assurance that you'll be able to sell that house even if the right private buyer doesn't come along.

No — companies that make instant cash offers are called iBuyers, and they generally make offers that are at or below fair market value so that they can resell your house on the open market.

A trade-in service, on the other hand, still gives homeowners the opportunity to list their home on the open market and get the best possible price.

Some iBuyers, like Opendoor, have a trade-in program, and most trade-in services will still buy your old home from you if they aren't able to sell it after a certain period of time.

The main difference between trade-in services and iBuyers is that iBuyers are focused on purchasing homes and reselling them quickly, while trade-in services are focused on helping you finance the purchase of your new home and then listing your old one.

Home trade-in pros and cons

✅ Pros
  • No double mortgage. Buyers won't be caught in a stressful situation where they have to pay their new mortgage and their old one at the same time.
  • Backup cash offer. If your house doesn't sell on the open market and you really need to sell it, you have the assurance of a cash offer from the trade-in company.
  • Flexible timeline. Because trading in means you don't have to line up the sale of your old home with the purchase of your new home, you can move out when you want and then list your old house.
  • Make your offer stand out. An all cash offer will stand out to home sellers because it doesn't come with any financing contingencies. This could increase the chance that a seller accepts your offer over someone else's.
❌ Cons
  • Service fees. All trade-in providers charge a service fee or a convenience fee. This fee can be as high as 6%, in Orchard's case, which is the same as what you would pay in realtor commissions.
  • Limited markets. Trade-in services are relatively new, so the major trade-in providers are only available in select markets.
  • Rental fees. Some trade-in programs require you to pay rent on your new home until you buy it back. HomeWard, for example, calculates this fee based on their mortgage costs while they're holding the home for you.

Buy-before-you-sell costs

Every home trade-in service structures its costs a little bit differently, but the cost to trade-in a home generally includes:

  • A service fee. A percentage of the purchase price that the company charges for conducting the trade for you. Sometimes this includes the agent's commission, and sometimes it doesn't.
  • Closing costs (buyer and/or seller). You'd be responsible for these in a typical real estate transaction too. With a trade-in service you sometimes have to pay your closing costs as a buyer, as a seller, or both. Buyers usually pay 3–5% in closing costs while sellers pay 1–3%.
  • Loan origination fees. Fees that you need to pay your mortgage lender. Keep in mind that if your lender is the trade-in company, you'll have to pay this fee directly to them. The average loan origination fee is 0.5–1%.
  • Rent. Some trade-in services charge rent on a daily or prorated monthly basis until you buy the new home back from the company.
  • Cash repayment. Since the trade-in company fronts the cash to buy your new house, you have to buy it back from them once your old home sells.

The fees and expenses that are passed onto you when you trade-in your home aren't charged until your old home sells. This means that they're deducted from your profits, so you'll only have to pay cash out-of-pocket if the costs exceed the profit from the sale.

🏠 Rent charges can add up!
In most cases, you'll need to continue paying the mortgage on your old home before it sells, plus utilities and taxes.
If the trade-in service charges rent on your new home until you buy it back, your final costs might be higher than you anticipated, depending on how long it takes to sell your old house. For example, Orchard charges $50–150 per day until the other house sells.


What to watch out for when you use a home trade-in program

🏦 Lender restrictions. Some home trade-in programs require you to use their mortgage lender in order to qualify. In this case, the mortgage interest and fees that you pay might not be the best available rate.

👨‍💼 Agent restrictions. If the trade-in program requires you to work with the company's in-house agents or partner agents, you might not be able to negotiate a better commission.

⏲️ Time limits. While backup cash offers are reassuring, you typically can't access them until your home has been on the market for a certain period of time. Flyhomes, for example, requires you to list your house for 90 days before you can accept their cash offer. That means you have to pay the mortgage and utilities for at least three months before you can sell directly to the company.

💰 Find your dream home, get cash back

Why leave extra money on the table? Clever can connect you with one of the top real estate agents in your area, plus put cash back in your pocket.

With Clever:

 ✅ You'll work with a full-service realtor from a top broker

 ✅ You'll earn cash back on qualifying purchases

 ✅ It's free, with zero obligation — you can walk away at any time

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Alternatives to buy-before-you-sell services

Using a buy-before-you-sell service is convenient, but it's not the only way to buy a new home and sell your old one at the same time.

Work with a traditional agent

Buying and selling at the same time may be a hassle, but it's a problem that real estate agents are used to solving for their clients.

One solution would be to have an agent ask for a sale and settlement contingency when presenting an offer to the seller. If the seller accepts the terms, they'll agree to wait for your home to sell before closing on the new home.

An experienced real estate agent can help you get your current home ready for showings and maximize the sale price.

Looking for an agent? Try Clever's free agent-matching service and list with a top local agent for only $3,000 or 1%!

Sell to an iBuyer

An iBuyer is a company that uses technology to make an offer on your home in 24–48 hours. They'll give you the certainty of a quick, convenient sale, but might not pay as much as you'd get on the open market.

Two of the biggest iBuyers are Opendoor and Offerpad. These services charge a 5% service fee. Another leading iBuyer, RedfinNow, charges a variable fee of 5–13%. iBuyers will also deduct any costs for necessary repairs, which could bring the price down even further. These costs are in addition to typical closing costs, which can range from 1–3%.

Still, many people find these trade-offs worth it, especially if they need to sell their current home to buy a new one.

FAQs about buy-before-you-sell services

Can you buy a home before yours is sold?

Yes, companies offering buy-before-you-sell or home trade-in services use the value in your current home to lend you the money you need to buy a new home. You can focus on selling your old home once you have moved into the new home. Find out more about buying a home before you sell.

Can I make an offer on a house before mine is sold?

Using a buy before your sell or cash offer service like Orchard or Knock, you can make an offer on a new home before selling your current one. These companies use the value of your current home to lend you the money to make a strong offer on a new home, entirely in cash in some cases. Find out more about cash offer companies.

Should I pay off my mortgage before selling my house?

Most people don't have their mortgage completely paid off before selling. You can sell your home first and use the proceeds to pay off the mortgage and put a down payment on a new home. If you want to buy first, buy-before-you-sell companies can help. Find out more about how you can buy a new home before selling your old one.

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