Selling your home to buy another: the complete guide

Should you sell first or buy first? Comparing the two strategies

This is the first decision to make, and the one on which everything else depends. There are two main strategies, each with its own advantages and risks.

Selling first means selling your current property and then looking for a new one. The advantage is twofold: you have the proceeds from the sale available and know exactly how much you can spend. This also gives you greater negotiating power when buying, as you can make an offer without a sale contingency. The downside is the risk of not finding the right home straight away and having to arrange temporary accommodation in the meantime.

Buying first means purchasing your new home before selling your current one. The main advantage is continuity: you can move directly from one property to the other without an intermediate stage. The financial downside, however, can be significant. If the sale of your current property takes longer than expected, you may have to cover the costs of two properties at the same time, potentially without having the proceeds from the sale available to fund the purchase.

The choice between the two strategies depends on two factors. The first is your financial situation: those who can temporarily afford two properties, or who can access a bridging loan, may be able to buy first; those who need the proceeds from the sale to finance the purchase will generally need to sell first. The second is the local market: in a market where properties sell quickly, selling first is less risky; where properties take longer to sell, buying first can expose you to a more costly waiting period.

How to coordinate the timing of a sale and purchase

The key challenge is timing: making the sale and purchase completions coincide, or at least take place as close together as possible. Ideally, they should be scheduled within a short timeframe, allowing you to use the proceeds from the sale directly towards the purchase and minimise the transition period.

There are several ways to manage this timing. One is to include clauses in the preliminary agreement that link the two transactions—for example, making your commitment to sell or purchase conditional on the completion of the other transaction. These clauses need to be carefully drafted to provide adequate protection without making the deal less attractive to the other party.

Another option is to negotiate the completion date with the buyer of your property. Agreeing on a later completion date can give you the time needed to finalise the purchase of your new home. Naturally, the buyer must be willing to accept this arrangement, which is where strong negotiation skills become important.

This is where the role of the estate agent becomes particularly valuable. Managing two transactions in parallel and coordinating their timelines is complex and requires experience. An agent overseeing both sides of the process can synchronise the two transactions far more effectively than someone handling them separately and independently.

Bridge loan: what it is and when it can be useful

Once you have found a new home but have not yet received the proceeds from selling your current property, a short-term financing solution may help: a bridging loan, also known as a bridge loan.

This is a short-term loan. It provides immediate liquidity to purchase the new property while waiting to sell the existing one. Here’s how it works: the bank generally provides an amount that does not exceed 60% of the value of the property to be sold, with a maximum term generally of two years. The distinctive feature lies in the repayment: during the life of the loan, only the interest is generally paid, while the principal is repaid in a single payment once the sale is completed, using the proceeds. To obtain it, the bank requires proof of the intention to sell, through documents such as the deed of purchase for the new property and the declaration that the existing property has been put up for sale.

However, this type of financing also involves costs and risks that should be considered. Interest rates are higher than those of a traditional mortgage because the bank operates over a short-term horizon. A double mortgage is often required, on both the property to be sold and the one to be purchased, with the related notary costs. The main risk is related to timing: if the sale is not completed within the agreed timeframe, the principal must still be repaid, even though the proceeds have not yet been received. It should also be noted that in Italy the availability of this type of financing is limited, and not all lenders offer it.

How to manage the transition period: where to live in the meantime

When there is a gap between selling your current home and buying a new one, you need to find a solution for that period. There are several options.

The first is temporary renting: moving into a rental property for a few months while waiting to move into your new home. This involves an additional cost and a double move, but offers flexibility. The second, where possible, is staying with family, as a low-cost temporary solution.

There is also a third option, often the most convenient: agreeing with the buyer of your property that you can remain in the home for a period after completion. In practice, you sell the property but continue to live there for a few weeks or months while completing the purchase and moving into your new home. This arrangement can be agreed on a paid basis, with the buyer receiving a fee, or, more rarely, free of charge. Naturally, the arrangement must be negotiated and clearly formalised, but it can provide an effective solution to the transition period, avoiding the need for temporary accommodation.

The most common mistakes and how to avoid them

Some mistakes are common when managing a sale and purchase at the same time.

The first is setting the asking price too high. A price above market value slows down the sale, and in a linked transaction this delay can hold everything up: without selling, you cannot buy, leaving the entire process on hold. A realistic valuation is even more important when timing is a key factor.

The second is not having a Plan B if the purchase falls through. Negotiations can break down, and having an alternative in place helps avoid being left without a home, especially if you have already sold your property.

The third is underestimating the administrative timelines: weeks or months can pass between the preliminary agreement, checks, mortgage procedures and completion, and these timeframes need to be factored into the planning.

The fourth, and particularly risky, is committing to a purchase before having reasonable certainty that the sale will go through. Committing to buy without knowing if and when your property will sell exposes you to the risk of having to cover two properties or being forced to sell your current home below market value under pressure from deadlines. The common thread behind these mistakes is a lack of planning: undertaking the process without a clear strategy and proper coordination is what makes it risky.

Why choose Engel & Völkers to manage both transactions

When a sale and a purchase are closely linked, having a single point of contact for both can make a significant difference to the overall experience.

Engel & Völkers can support clients on both fronts, with a clear advantage: coordinating the timing of the two transactions, taking an overall view of the process, and providing access to its network of properties and buyers, increasing the chances of successfully aligning the sale and purchase. Those selling their home to buy another can therefore find both a buyer for their current property and their new home within the same network.

The value of a property consultant, in one of the most complex transactions in the real estate market, lies precisely in ensuring that clients are not left to face the most difficult decisions alone: guiding them through every stage, anticipating potential issues, and keeping two transactions aligned that, if managed separately, might never come together.