Selling a Home in Another State While Buying in New Jersey: How to Time Two Moves
Published | Posted by Dennis Mark Interdonato
- Relocation
- Selling and buying
- Moving to New Jersey
- Buying a home in New Jersey
There are three ways to do it: sell first and rent in between, buy first and carry both homes for a while, or line the two closings up as close together as possible. The right one depends on how much of your next down payment is sitting in the home you're selling, what your lender will approve, and how much risk you can live with.
I'm Dennis Mark Interdonato with The Dennis Mark Group at Keller Williams Realty Ocean Living. Buyers moving to Monmouth and Ocean County often have a house to sell somewhere else, and the timing is what keeps them up at night: "What if I sell and can't find the next place in time?" Here's how to plan it.
Should you sell first or buy first?
The Consumer Financial Protection Bureau describes the usual order: "If you want to move, you normally try to sell your home first before buying another one." That's the safe default, but it isn't the only option.
- Sell first. You know exactly what you have to spend, and you never carry two mortgages. The tradeoff is that you may need a place to live in between. That's where a short rental comes in; see renting first vs buying right away.
- Buy first. You move once and you get the house you want when you find it. The tradeoff is paying for two homes until the first one sells, and you need a lender who approves you with both.
- Line them up. You sign a contract on the New Jersey home and set closing dates so the sale closes first, or the same week. It's the most efficient path and it needs the most coordination.
How do you buy in New Jersey before your current home sells?
The financing decides this, so talk to a lender before you tour. Common routes include:
- Qualifying with both payments. If your income and savings support both homes for a while, the lender may approve you without selling first.
- A bridge loan. Federal mortgage rules describe it as "a temporary or 'bridge' loan with a term of 12 months or less," used to buy a new home when you plan to sell the current one within 12 months. Ask your lender whether they offer one and what it costs.
- An offer that depends on your sale. You can write an offer that's contingent on your current home selling. Sellers weigh that against offers without the condition, so how well it works depends on the house and the moment.
Your lender, not your agent, tells you which of these you qualify for.
How do you line up the two closings?
- Price the house you're selling right. The first two weeks on the market set the price. A home priced right draws its strongest buyers early, and that's what makes the rest of the calendar possible.
- Get pre-approved here before you list there. Then you can move on a New Jersey home the week you find it.
- Build attorney review into the calendar. New Jersey contracts written by real estate licensees carry a three-business-day attorney review, counted from delivery of the signed contract, and "you do not count Saturdays, Sundays or legal holidays." Line up a New Jersey real estate attorney before you make an offer.
- Put the sale's closing first. If the money from your sale is funding your purchase, the sale needs to close before, or on the same day as, the purchase. Give yourself a cushion of a few days if you can.
- Watch the Closing Disclosure date. Your lender must give you the Closing Disclosure "at least three business days before you close," so a late change can push your date. Stay on top of every document your lender asks for.
What happens to the money from your sale?
Two things to know. First, taxes. Under federal rules, you can generally exclude up to $250,000 of gain from the sale of your main home, or $500,000 for a married couple filing jointly, if you owned it and lived in it for at least 24 months of the five years before the sale (IRS Publication 523). There are exceptions, and the state you're leaving has its own rules, so your tax professional runs those numbers.
Second, moving the money. Your down payment and closing funds usually travel by wire, and closing scams aim right at that moment. The CFPB warns that "mortgage closing scams target homebuyers who are close to their closing date." Confirm every wiring instruction by calling a number you already have, never one from an email.
What does this look like when you're moving to Monmouth or Ocean County?
From a distance, the hard part is seeing homes. My team and I preview homes in person and walk you through them on live virtual tours, so you can rule a house in or out before you book a flight. Showing feedback, offers and inspection results come to you in writing, so you know where things stand without being in the room. The full process is on the relocation page, and the Relocation Guide lays out the order of operations for buying here from another state.
If the house you're selling is in New Jersey too, the sell-and-buy plan is a little different. Start with a free home value, then read how selling and buying at the same time works in New Jersey.
What are the most common timing mistakes?
- Shopping before talking to a lender. You can't pick between buying first and selling first until you know what you're approved for.
- Overpricing the house you're leaving. A stale listing in one state stalls the purchase in the other.
- Leaving no cushion between closings. One late document can move a date.
- Forgetting attorney review. The New Jersey clock doesn't run on weekends or legal holidays.
Frequently Asked Questions
Can I buy a house in New Jersey before I sell my house in another state?
Yes, if your lender approves you with both homes or you use another financing option, such as a bridge loan. Talk to a lender first.
What is a bridge loan?
A short-term loan, typically 12 months or less, used to buy a new home when you plan to sell your current one within that time. Ask lenders whether they offer it and what it costs.
Do I pay tax when I sell my home in another state?
You may be able to exclude up to $250,000 of gain, or $500,000 married filing jointly, under IRS Publication 523 if you meet the ownership and use tests. The state you're leaving has its own rules, so check with a tax professional.
How long does attorney review take in New Jersey?
Three business days from delivery of the signed contract, not counting Saturdays, Sundays or legal holidays.
This is general information, not legal, tax or lending advice. Your attorney, lender and tax professional advise on your own situation.
About the author
Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. He has been in construction since 2003, building and renovating New Jersey homes. Read more about Dennis Mark.
Keep reading
- What it costs to buy a home in New Jersey
- How long it takes to close on a house in New Jersey
- Have a question this didn't answer? Send it to Dennis Mark and it may become the next article.
