Are Buy Before You Sell Programs Worth It?

Navigating a sale and purchase of a home at the same time isn’t easy. You need to align closing dates, manage finances, handle contingencies and any real estate agent will tell you that if it seems difficult, it’s going to be even harder than you anticipated.

A buy-before-you-sell program can help alleviate some of the time pressure. But are these programs really worth the cost?

In this article, we’ll break down how they work, their advantages and drawbacks, and whether they make sense based on different scenarios.

What Are Buy Before You Sell Programs?

A Buy Before You Sell (BBYS) program is a short-term financing option that helps homeowners purchase a new home before selling their current one. Real estate companies, mortgage lenders, and financial technology platforms like HomeLight and Homeward offer these programs to bridge the gap between buying and selling.

For a cost, BBYS programs eliminate the stress of timing both transactions perfectly. Instead of waiting to sell their current home, buyers can secure their next property immediately. BBYS programs make the buying and selling process more efficient—especially in competitive markets where contingent offers often struggle to compete.

However, every program comes with different costs, terms, and risks, so homeowners should evaluate whether this option aligns with their financial situation and market conditions.

How a BBYS Program Works

There are three main types of BBYS programs: bridge financing, guaranteed offer, or direct purchase.

With a bridge loan, the BBYS program provider offers a short-term loan or advance, allowing homeowners to buy first and repay the loan after selling their old home.

A guaranteed offer involves a company guaranteeing an offer on your house within a set timeframe, allowing you to make a contingent offer on a new home.

With a direct sale, the company buys the homeowner’s property outright so that you purchase another.

The most commonly used BBYS program is bridge financing. While bridge loans vary by lender, they usually have a term of 6-12 months and quick funding (within 3 weeks).

Most have flexible repayment options including interest-only payments or even deferred payments until the existing home sells. The downside is that they come with considerably higher interest rates than a traditional mortgage.

How to Access a Buy Before You Sell Program

If you want to use a BBYS during your home sale process, you need to first select the right program for you.

For some, a bridge loan is an attractive solution, but others want the comfort of a guaranteed offer. Make sure you understand all of the costs and fees associated with the program.

Once you have found a program and terms with which you feel comfortable, it’s time to see if you qualify.

• Apply and Get Approved
  Submit an application and undergo a financial review, similar to applying for a mortgage, to determine eligibility. Providers assess the homeowner’s financial situation including the income and the expected market value of their existing home.
• Receive an Offer or Financing Assistance
  Once a homeowner is approved for a Buy Before You Sell (BBYS) program, the provider extends either a bridge loan or a guaranteed offer—depending on the specific program the homeowner applied for. The homeowner will need to accept the terms of their offer to proceed.
• Purchase a New Home
  The homeowner makes a non-contingent offer and secures their new home without waiting for the old one to sell.
• Move In and Sell the Old Home
  Once moved into the new home, the homeowner sells their previous property—often with the program’s support. Some programs help with staging, marketing, and real estate agent services, which both help the homeowner and ensures that the investor (BBYS provider) gets a good return.

It’s important to check the process for the program you apply for. Companies like Knock and Homeward will have different requirements and steps. The steps, fees, and support services can all vary, so it’s important to understand the specifics of the program you choose. While the general idea remains the same, the details depend on the provider.

Pros of Buy Before You Sell Programs

Buy Before You Sell (BBYS) programs can ease the transition between homes by removing common roadblocks like home sale contingencies, rigid timelines, and temporary housing issues.

Eliminates Home Sale Contingency

When buying a home while still owning another, many buyers include a home sale contingency in their offer. This contingency means that their ability to close on the new property requires selling their original home. While this protects the buyer, it also makes their offer less appealing to sellers, especially in competitive markets.

Buyers who use a BBYS program can submit a non-contingent offer even if they haven’t sold their other house because they either have the temporary finance or guaranteed offer. Since sellers prefer buyers who can move forward without waiting on another transaction, this increases their chances of getting their desired home, especially in bidding wars.

Eliminating the contingency also provides greater control over both transactions. Buyers are not pressured to accept a lower offer on their current home to meet tight timelines, allowing for more strategic negotiations on both the purchase and sale. Without the risk of a deal falling through due to delays in selling an existing home, the entire process becomes more predictable and less stressful.

More Convenience and Flexibility Before You Home Sells

Coordinating the sale of one home while purchasing another requires careful timing, financial planning, and flexibility. A BBYS program removes many of these pressures by allowing buyers to secure their next home before selling their current one.

This flexibility eliminates the need for quick, potentially unfavorable sales and provides the freedom to wait for the right offer. Instead of settling for a lower sale price or making hasty compromises, homeowners can take the time needed to prepare, market, and sell their homes under better conditions. By separating the buying and selling processes, BBYS programs create a smoother transition.

No Temporary Housing or Double Moves

Selling a home before buying another often creates a gap between move-out and move-in, requiring temporary housing and multiple moves. A BBYS program helps remove this gap period by allowing homeowners to move directly into their new home before selling the old one.

Buyers don’t need to align two transactions or worry about selling their home and finding temporary housing while looking for their next home. This not only alleviates stress but also reduces costs, as temporary housing usually comes at a premium. Avoiding a double move also minimizes disruption, particularly for families with children, pets, or school schedules to consider.

Professional Assistance with Selling Your Home

Many Buy Before You Sell programs offer services designed to help homeowners sell faster and even for a better price. Some providers include staging, professional photography, and marketing support to make listings more appealing to buyers. Others connect sellers with experienced real estate agents specializing in pricing strategies and negotiations.

Some companies go a step further in assisting homeowners with home preparations. For example, Orchard offers a Concierge service that may provide interest-free funding for home repairs before listing. These added services help streamline the selling process and improve the chances of securing a strong offer.

Cons of Buy Before You Sell Programs

Buy Before You Sell programs can make moving easier, but they’re not without drawbacks. Imagine finding your dream home, only to realize the convenience of buying first comes with extra fees, higher interest rates, or the risk of carrying two mortgages.

These trade-offs don’t always make sense for every homeowner. Before committing, it’s important to weigh the costs and decide if the benefits truly align with your situation.

Higher Costs

The ability to buy a new home before selling the old one comes at a price. BBYS programs charge service fees, transaction fees, or a percentage of the home’s sale price for the convenience they offer. These costs vary by provider, but they can significantly cut into the final proceeds from the sale. Using a BBYS program will limit how much equity you have to carry into your next home.

For homeowners using bridge financing, the costs can be even higher. Bridge loans typically have higher interest rates than traditional mortgages, and some lenders charge additional fees for origination, underwriting, or closing. Holding two properties at once also means covering two mortgage payments, property taxes, homeowners insurance, and maintenance costs until the original home sells.

Some BBYS providers offer repair or staging assistance to help homeowners get top dollar for their sale, but these costs are often recouped at closing. While these services can help attract buyers, they add another expense to consider.

Risk of Lower Sale Price

Selling through a BBYS program, like a guaranteed offer or guaranteed sale, doesn’t mean you will get the best price. If a provider offers to buy the house directly, they will apply a discount to ensure they can resell the house for a profit.

In exchange for some loss on the achieved sale price, sellers get access to their sale proceeds when they need them for their next home. Sellers who prioritize a safe transaction, lower stress, and speed over sale price might find this an attractive trade-off.

Even if homes are listed on the open market with a BBYS program, you might find that the listing comes with restrictions or pricing strategies that impact how the home is marketed. Some companies require sellers to work with specific agents or follow their pricing guidelines, which can limit flexibility.

Market conditions also play a role. If the home doesn’t sell as quickly as expected, sellers may be required to lower the asking price to attract buyers, further cutting into their final proceeds.

Limited Availability

BBYS programs are not available to all homeowners. Most providers only operate in select metro areas to limit market risk. This leaves sellers in smaller cities or rural locations without access to a BBYS solution; however, they may still be able to get a bridge loan.

Even in areas where these programs are available, not all homeowners or properties will qualify. Most providers have strict credit score, income, and home equity requirements, meaning buyers must meet specific financial thresholds to participate. Companies also limit eligibility based on property type, loan amount, or location, making it harder for certain sellers to take advantage of these programs.

Another limitation is the requirement to use the BBYS provider’s preferred real estate agents, lenders, or service partners. These stipulations can reduce flexibility for homeowners who already have a trusted agent or preferred lender they’d like to work with.

Debt Load and Financial Risk

For those relying on bridge financing, the financial risk is one of the biggest concerns. If the original home doesn’t sell quickly, homeowners may be stuck carrying two mortgage payments for longer than expected.

Homeowners with a bridge loan take on the risk of declining home values. If market conditions shift while the old home is still on the market, the seller may end up chasing the market, and the property will sell for less than originally anticipated. This can leave sellers in a difficult situation if they need the sale proceeds to refinance out of their bridge loan and into a permanent mortgage.

Additionally, some BBYS programs place time limits on how long a home can remain unsold before additional fees apply, creating even more financial pressure.

Are Buy Before You Sell Programs Worth It?

For some buyers, a Buy Before You Sell program is the perfect solution. For others, it’s an unnecessary expense. Whether it’s worth it depends on market conditions, financial flexibility, and the amount of risk you’re willing to take.

These programs make the most sense in competitive markets, where non-contingent offers stand out, and waiting to sell could mean losing a great home. They’re also useful when the right property comes along and waiting isn’t an option. For homeowners with the financial cushion to handle two properties temporarily, the ability to buy first and sell later can make the transition much smoother.

But if there’s no rush to move, selling first may be the smarter play. Avoiding extra fees, interest payments, and the pressure of carrying two mortgages can make a traditional sale the better choice. In some cases, the added costs simply don’t justify the convenience, especially in slower markets where sellers are more willing to accept contingent offers.

A BBYS program isn’t a shortcut—it’s a trade-off. For some, it’s worth the price of convenience. For others, waiting and selling first is the better financial move.

Alternatives to Buy Before You Sell Programs

A BBYS isn’t the only way to transition between homes. For homeowners looking for flexibility or lower costs, alternative options may be a better fit.

Home Equity Loan or HELOC

For homeowners who have built up significant equity in their current home, a home equity loan or home equity line of credit (HELOC) can provide the funds needed for a down payment or even the full purchase of a new home.

A home equity loan provides a lump sum with a fixed interest rate, making it a predictable option for financing a new home before selling the old one. A HELOC, on the other hand, works like a credit line, allowing homeowners to borrow what they need when needed.

Compared to bridge loans, home equity loans and HELOCs often have lower interest rates and fewer fees. However, they do come with risks—if the original home doesn’t sell quickly, homeowners may end up juggling multiple loan payments, which can create financial strain.

Renting Temporarily

For homeowners who don’t want to take on additional debt, selling first and renting temporarily can be a more cautious approach. This strategy allows more time to shop for the right home without feeling pressured to buy quickly.

Renting also removes the financial burden of carrying two mortgages. However, moving twice can be inconvenient, and short-term rentals may come at a premium—especially in areas with limited housing supply. Still, this can be a smart alternative for those who prioritize financial flexibility.

Home Sale Contingency

In slower housing markets, home sale contingencies are still a viable option. This contingency allows buyers to submit an offer on a new home while making the purchase contingent on selling their current home first.

The downside is that sellers often view contingent offers as risky, making them less competitive—especially in a multiple-offer situation. Buyers may need to offer a higher price or better terms to stay in the running against other offers. However, a home sale contingency can still be a practical choice for those who aren’t in a rush and want to avoid extra costs.

Is a Buy Before You Sell Program Right for You?

Are you stressed about selling your current house to buy another? Buy Before You Sell programs can offer a smoother transition between homes, but it’s not the right fit for everyone due to costs and restrictions. Before committing, take the time to evaluate your financial situation, local market conditions, and personal needs.

If buying first provides a strategic advantage (such as in a competitive market where non-contingent offers are preferred), it may be worth the extra cost. However, if selling first allows for better financial stability, a traditional approach might be smarter.

The best way to determine if a BBYS program aligns with your goals is to consult with a knowledgeable real estate agent. FastExpert makes it easy to connect with top-rated agents who understand your market and can help you weigh your options. Use our free agent search to find an experienced professional who can guide you through the decision-making process.