Buying a new home in Lafayette before you sell your current one can feel like a high‑wire act. You want to secure the right address and keep life steady for your family, but you also want to manage risk and cash flow. The good news is you have options that work in our local Contra Costa market. In this guide, you’ll learn practical financing paths, contract strategies, timelines, and what Lafayette sellers typically accept so you can move with confidence. Let’s dive in.
Start with a Lafayette plan
Lafayette’s single‑family homes often sit above county medians, so many buyers use jumbo financing or larger down payments. That reality shapes which tactics are competitive. When inventory is tight and sellers see multiple offers, clean, well‑qualified offers win. When the market cools, sellers can be more open to contingencies or rent‑backs.
Your first step is to clarify timing and risk tolerance. Decide whether you want to carry two mortgages for a short stretch or use tools that free up equity before you sell. A local pre‑approval and a written game plan will help you move quickly when the right home appears.
Financing paths to buy before you sell
Bridge loan
A bridge loan is a short‑term loan secured by your current home that provides funds for your next down payment. Many products are interest‑only and designed to be paid off when you sell.
- Mechanics: Borrow against your equity to cover the down payment or closing funds on the new purchase.
- Timeline: About 1 to 4 weeks depending on lender, documentation, and valuation.
- Qualification: Lenders review combined loan‑to‑value, debt‑to‑income, credit, reserves, and available equity. In Lafayette, ask about jumbo bridge options.
- Pros: Access to cash without selling first; can close quickly.
- Cons: Higher rates and fees than standard mortgages; potential for two housing payments if your sale takes longer than expected.
HELOC or home equity loan
A HELOC is a revolving line of credit secured by your home; a home equity loan is a fixed second mortgage. Both can help with down payment funds or interim costs.
- Timeline: Often 2 to 6 weeks, depending on appraisal and underwriting.
- Qualification: Lenders consider combined loan‑to‑value, income, and credit. Some cap total CLTV near 80 percent and may have jumbo HELOC options.
- Pros: Flexible draws with a HELOC; rates can be lower than bridge financing; useful for repairs or closing costs.
- Cons: HELOC rates are usually variable; some lenders restrict using draws directly for down payments on purchases. Confirm terms with your lender.
Cash‑out refinance
You can refinance your current mortgage for more than you owe and use the difference as cash toward the new purchase.
- Timeline: Often 4 to 8 weeks and tied to full refinance underwriting.
- Pros: May offer a lower rate than a bridge loan and consolidates debt into one loan on your current home.
- Cons: Closing costs and timing can be longer; not ideal if you need to move fast or if you want to keep an attractive existing mortgage.
Carry two mortgages
If your income and reserves support it, you may qualify for the new mortgage without selling your current home.
- Pros: Simple structure with no second lien or refinance.
- Cons: Higher monthly burden for a period; lenders may require significant reserves and have stricter underwriting for jumbo loans.
Use savings or retirement funds
Some buyers use liquid savings for the down payment. If you consider borrowing from retirement accounts, understand potential taxes, penalties, and repayment rules. Speak with a financial or tax professional before using retirement assets.
Sell first with a leaseback
You can sell your current home and negotiate a post‑closing occupancy so you remain in place as a tenant for a defined period.
- Pros: Unlocks equity for your next purchase and reduces the risk of carrying two mortgages.
- Cons: Requires a buyer willing to agree to post‑possession terms. You will have a written occupancy agreement covering rent, security deposit, insurance, utilities, and move‑out condition.
Offer and contract strategies in Contra Costa
Make a sale‑of‑home contingency work
A sale contingency ties your purchase to the successful sale and close of your current home. In faster markets, many sellers prefer non‑contingent offers, but contingency offers can work with compensating strengths.
- Use cases: You want to avoid carrying two homes and need proceeds from your sale.
- How to strengthen: Offer a higher price or larger earnest money, shorten contingency windows, and show strong lender pre‑approval with a clear path to close.
Strengthen your offer without overreaching
Sellers weigh certainty. You can improve your position by:
- Providing a larger earnest money deposit and proof of funds.
- Shortening inspection, appraisal, and loan contingency periods when appropriate.
- Adding appraisal‑gap coverage or flexible closing dates aligned to the seller’s needs.
- Including pre‑approvals for bridge or HELOC funds.
Use post‑possession and rent‑backs wisely
Two patterns help buy‑before‑sell moves:
- Buyer allows the seller of your target home to stay after close for a short period so you can line up your sale and move with less overlap.
- When you sell your current home, you negotiate to remain as a tenant for a defined time after closing.
Use written agreements with clear terms on rent, deposits, utilities, insurance, occupancy length, and move‑out condition. Escrow and title teams will attach the document to the closing package.
Consider an investor leaseback
Some investors or specialized buyers offer a sale‑leaseback on your current home, trading a slightly lower sale price for speed and flexibility. This can be a bridge to your next purchase but weigh the pricing tradeoff.
Sequencing options that work
Option A: Buy first and carry the old home
- Secure bridge financing, a HELOC, or qualify to carry two mortgages.
- Close on your Lafayette purchase.
- Move in, then list your former home quickly for best presentation.
- Risk: Short‑term carrying costs if the sale takes longer.
Option B: Contingent purchase
- Make an offer contingent on the sale of your existing home, with short timelines.
- Proceed if you meet the contingency deadlines; if not, you can be released.
- Risk: Less attractive to sellers in tight markets.
Option C: Sell first with post‑possession
- Sell your current home and remain temporarily under a written occupancy agreement.
- Use proceeds for a stronger, non‑contingent purchase.
- Tradeoff: You become a short‑term tenant and must manage a defined move‑out date.
Option D: Hybrid with investor leaseback
- Sell quickly to an investor and lease back.
- Use the funds to buy, then exit the leaseback on schedule.
- Tradeoff: Potentially lower net sale price for convenience and speed.
Timelines to expect
- Contingency windows: Commonly 30 to 60 days to list and close the sale tied to your purchase; shorter windows are more competitive but riskier.
- Bridge or HELOC funding: Often faster than a full refinance, but plan for 1 to 6 weeks depending on product and underwriting.
- Escrow periods: In California, 30 to 45 days is common. Align closings to reduce overlap and stress.
Costs, taxes, insurance, and exit plans
Carrying costs to budget
When you own two homes briefly, build a conservative “worst‑case” budget. Include mortgage payments, property taxes, homeowners insurance, HOA dues if any, utilities, maintenance, and potential staging or touch‑up costs. Aim to hold 3 to 6 months of reserves.
Tax considerations to discuss
The IRS allows a primary‑residence exclusion on capital gains if you meet ownership and use tests. Buying first and selling later can affect timing. Mortgage interest deductibility has limits on acquisition debt. Consult your CPA and review IRS guidance, including rules summarized in Publication 523, for your specific situation.
Insurance and title details
Make sure your owner’s and lender’s title insurance reflect occupancy and any post‑possession. When you negotiate a rent‑back, clearly define who carries which insurance during the occupancy period.
Exit planning if your old home stalls
If your former home does not sell quickly:
- Re‑evaluate pricing and presentation with your agent.
- Offer buyer credits or address repairs to improve certainty.
- Consider renting the property long‑term after reviewing local landlord rules and rental demand.
- If using bridge financing, understand default remedies and payoff timelines.
What Lafayette sellers typically accept
Sellers in higher‑priced East Bay suburbs look for strong financials and clear paths to closing. You can increase certainty by showing:
- Lender pre‑approval tailored to your plan, including bridge or HELOC commitments when relevant.
- Larger earnest money and shortened contingency timeframes where prudent.
- Flexibility on closing or reasonable rent for short seller occupancy after close.
Contingent offers are possible. They are more persuasive with higher price, stronger deposits, and short, clearly defined timelines.
Your next steps
Talk to local lenders early. Ask about jumbo bridge loans, HELOC limits, documentation, reserves, and estimated timelines.
Gather documents. Prepare pay stubs, W‑2s or 1099s, tax returns, bank and investment statements, and HOA details if applicable.
Map your sequencing. Decide between carrying two mortgages, using a bridge or HELOC, or selling first with a rent‑back.
Pre‑market your current home. Address light repairs, declutter, and plan staging so you can list promptly when you secure your next home.
Coordinate your calendar. Align escrow lengths, contingency windows, and any post‑possession to minimize overlap.
Keep a reserve plan. Build a 3 to 6‑month cushion and an exit plan if your sale takes longer.
When you want local, hands‑on guidance from search to close, connect with Gillian Judge Hogan. You’ll get a calm, clear plan tailored to Lafayette and Contra Costa County, plus the strategy and negotiation to make it happen.
FAQs
What is a bridge loan for buying in Lafayette?
- A bridge loan is a short‑term loan secured by your current home that provides funds for your next down payment, typically paid off when your old home sells.
How do rent‑backs work after closing in California?
- A rent‑back lets a seller remain in the home after closing under a written agreement that covers rent, deposits, insurance, utilities, occupancy length, and move‑out condition.
Can I use a HELOC for my down payment on a new home?
- Some lenders allow HELOC funds for a purchase down payment, but policies vary and may include limits or seasoning rules, so confirm terms with your lender.
How can I make a contingent offer stronger in Contra Costa?
- Increase earnest money, shorten contingency periods, show full lender pre‑approval, and align closing or rent‑back terms with the seller’s needs.
What if my old home doesn’t sell after I buy in Lafayette?
- Reassess pricing and marketing, consider buyer credits or repairs, evaluate renting the home, and review bridge or HELOC payoff timelines with your lender.
How long are typical escrow periods when buying and selling?
- In many California transactions, escrow runs 30 to 45 days; coordinate both closings and any post‑possession to reduce overlap and stress.
