How to buy a house before selling your current home
You found the house. Your equity is locked in the one you're living in, the seller won't take a contingent offer, and you don't income-qualify for two mortgages. There's a program built for exactly this, and most Las Vegas homeowners have never heard of it.
Guaranteed backup offer
70%
Of your current home's market value
Contract good for
180 days
You're never obligated to sell to them
Decision turnaround
4 hours
From address and estimated value
This one comes from a conversation with Wes Freedman, our mortgage advisor, who runs into this problem constantly.
The situation is familiar. You own a home with real equity in it. The family is growing, or you're ready to step up, and you've found the house you want. But your current home hasn't sold, so every offer you write is contingent on selling it first — and contingent offers lose.
Four problems stack up at once: your money is trapped in your current home, your offers are weak, your income doesn't support two mortgages, and you don't want to move twice.
The guaranteed backup contract
An investor writes a real, binding offer on your current home at roughly 70% of market value, good for 180 days. It's a genuine contract, which is the point — your home now counts as sold on paper.
That single fact solves the qualification problem. With a signed contract in place, the lender no longer has to count your existing mortgage against your debt-to-income ratio. Your buying power opens up.
It also lets you write offers on the new house without a sale contingency, because your sale is already covered.
You are never obligated to sell to them. The 70% offer is a floor, not the plan — it's there so you can list your home normally and sell it at full market value.
The obvious question is how often that backup actually gets exercised. The company running this program has operated since 2019 and writes ten to fifteen of these a week nationwide. In that entire time they've had to buy the home four times. They don't want your house. They want the fee for bridging the gap.
Full price still isn't enough
That's a live deal, not a hypothetical. We offered full price with a contingency and the seller took $15,000 less from a buyer who didn't have one.
Sellers discount contingent offers because they're built on something outside anyone's control. On one of our listings, a California buyer came in at full price, cash, no closing costs requested — with their own home already in contract. Days from agreement, their California escrow cancelled over an inspection issue. The whole thing collapsed.
A seller who takes a contingent offer is betting on a transaction they can't see and can't influence. Most won't.
What this looks like in real numbers
You bought in 2019 for $300,000. You've paid the balance down to $270,000. Today it's worth $500,000, and you want to buy at $700,000.
| Amount | Notes | |
|---|---|---|
| Current market value | $500,000 | What it should list for |
| Mortgage balance | $270,000 | What you still owe |
| Your equity | $230,000 | Trapped until you sell |
| Guaranteed backup contract | $350,000 | 70% of market value |
| Instant equity available | $80,000 | $350,000 contract minus $270,000 owed |
That $80,000 becomes cash you can use before your home sells — for the down payment on the new house, closing costs, moving expenses, or light renovation on the property you're leaving.
Terms on the instant equity
- No income documentation and no credit qualifying — it's driven purely by your equity
- Interest-only at 9.99%
- No payments until your current home sells
- Funded roughly five days before you close on the new home, so you don't pay interest waiting
On $80,000 at 9.99%, that's about $666 a month in accrued interest — and nothing is due until your home sells. The rate is high because you're buying convenience and speed with no underwriting. That's the trade.
What it costs
A flat fee on a sliding scale, based on the backup contract price:
| Backup contract price | Fee |
|---|---|
| $500,000 or less | $2,500 |
| Up to $750,000 | $3,500 |
| Up to $1,000,000 | ~$5,000 |
The fee isn't paid until you've identified the new property and your loan is approved. Add the accrued interest on the instant equity if you use it, and that's the full cost.
On the earlier example, that's $2,500 plus whatever interest accrues in the weeks before your home sells.
Where the money comes back
Selling vacant is worth more than selling occupied — and in Las Vegas the gap is documented. Our June market report found that vacant listings sold at roughly three times the rate of occupied ones, at meaningfully higher prices. Vacant homes show better, they're easier to schedule, and they sell faster.
If selling vacant nets you even $2,500 more than selling while living there, the fee has paid for itself. Given the data, that's a favorable bet.
What happens to the rest of your equity
Back to the example. Your home sells at market for $500,000. The $350,000 backup contract is satisfied, which covers your old $270,000 mortgage and the $80,000 you took as instant equity. That leaves roughly $150,000.
It's yours. A few options worth knowing:
Recast the new mortgage. This is the one most people haven't heard of. You apply a lump sum to principal and the lender recalculates your payment across the remaining term. It costs around $250 — nothing like a refinance — and it lowers your monthly payment for the life of the loan. Minimum is usually $10,000, and you don't have to use all of it. Put $50,000 toward a recast and invest the other $100,000 if that suits you better.
Note the difference from a principal payment. Paying extra toward principal reduces your balance but leaves your payment unchanged. A recast reduces the payment itself. Same money, different outcome.
Or deploy it elsewhere. Pay down high-interest debt, max a Roth, fund a 529 or HSA, or invest it. If you're comfortable with the new payment, that money may work harder somewhere other than your mortgage.
Two things to watch
A flat or declining market. This program assumes your home sells near market value in a reasonable timeframe. In a market with thin demand, that assumption gets shaky and you're exposed to price reductions while carrying costs. Las Vegas currently sells over 2,000 homes a month at 97 to 98% of list price, which is the kind of demand that makes this work. A small rural market is a different question.
Overlapping payments. Your first payment on the new home is due about 45 days after closing. If your old home hasn't sold by then, you're carrying both. The program helps you qualify, but it doesn't make the old mortgage disappear.
The whole strategy depends on pricing the old home correctly from day one. Overprice it and you turn a bridge into a burden.
It works for downsizing too
Say you bought in 2002 for $100,000. Twenty-four years of payments later the balance is $20,000, and the home is worth $500,000 — $480,000 of equity.
The backup contract comes in at $350,000. Subtract the $20,000 you owe and there's $330,000 available. If you're buying something smaller than that, you can purchase your next home in cash without selling first and without a contingent offer.
If the new home costs more than the available equity, a small mortgage covers the difference, and you can pay it off or recast once the old home sells.
What's required
Less than you'd think. To get a decision, the investor needs the property address and an estimated market value. They run their own analysis and can render a decision and issue the backup contract within about four hours.
- Property address and current mortgage balance to start
- No credit qualifying for the backup contract or the instant equity
- Credit is checked for the new home purchase, as with any mortgage
- It doesn't matter what type of loan is on your existing home
One meaningful limitation. When you're using this program to solve a debt-to-income problem, the purchase loan on the new home currently has to be a Fannie Mae conventional loan. There's discussion of extending it to FHA, USDA and VA, but that isn't settled. Minimum down payment is 5%, since you already own a home.
Buy before you sell FAQ
How can I buy a house before selling my current home?
A guaranteed backup contract is one route. An investor writes a binding offer on your current home at roughly 70% of market value, good for 180 days. Because your home is under contract, your lender no longer counts the existing mortgage against your debt-to-income ratio, and you can write non-contingent offers on the new home. You are not obligated to sell to the investor — you list and sell normally at full market value.
What is a guaranteed backup contract?
A real, binding purchase offer on your existing home from an investor, typically at 70% of current market value and valid for 180 days. It functions as a floor rather than a plan. Its purpose is to remove your current mortgage from your debt-to-income calculation and let you make offers without a sale contingency. The company operating this program writes ten to fifteen weekly nationwide and has had to purchase the home only four times since 2019.
What does buy before you sell cost?
A flat fee based on the backup contract price: $2,500 for contracts of $500,000 or less, $3,500 up to $750,000, and about $5,000 up to $1 million. The fee is not paid until you have identified the new property and your loan is approved. If you also draw instant equity, that accrues interest-only at 9.99%, with no payments due until your current home sells.
What is instant equity and how does it work?
It's cash drawn against the difference between your guaranteed backup contract price and your existing mortgage balance. On a $500,000 home with a $270,000 mortgage, the backup contract is $350,000 and the instant equity available is $80,000. There is no income documentation or credit qualifying. It carries an interest-only rate of 9.99%, funds about five days before you close on the new home, and requires no payments until your current home sells.
Could I end up making two mortgage payments?
Yes, if your current home takes longer than expected to sell. Your first payment on the new home is due roughly 45 days after closing. If the old home hasn't closed by then, you'll carry both until it does. The program improves your ability to qualify but doesn't eliminate the old mortgage, which is why pricing the departing home accurately from day one matters.
Can I use this to downsize rather than move up?
Yes. If you have substantial equity and low debt, the backup contract may cover your next purchase outright. On a $500,000 home with a $20,000 mortgage balance, the $350,000 backup contract leaves roughly $330,000 available — enough to buy a smaller home in cash without selling first or making a contingent offer.
What kind of mortgage do I need on the new home?
When the program is being used to solve a debt-to-income problem, the purchase loan currently must be a Fannie Mae conventional loan. There is discussion of extending eligibility to FHA, USDA and VA loans, but that has not been finalized. Minimum down payment is 5%, since you already own a home. The loan type on your existing home doesn't matter.
See if it fits your situation
If you're thinking about moving up, downsizing, or worried about qualifying while you still own your current home, book a consultation. We'll walk through your numbers, explain your options, and if this strategy makes sense, connect you with Wes to see whether you qualify.
All it takes to get a preliminary answer is your property address and current mortgage balance.