Buying and Selling a Home at the Same Time in Utah

Should you buy first or sell first?

Many sellers end up somewhere in the middle: they line up both closings close together and use the contract terms below to cover the gap.

How does a home sale contingency work in Utah?

The state-approved Utah Real Estate Purchase Contract (REPC), the form Utah law requires real estate licensees to use, asks the question directly in Section 2.2, Sale of Buyer's Property: the buyer's ability to buy, get the loan, or use the cash for the purchase either IS or IS NOT conditioned on selling real estate the buyer owns. If it is, the terms go in an attached addendum.

That addendum typically spells out:

• The home you must sell and by when.
• Whether your home must already be under contract, or only listed.
• Whether the seller can keep marketing their home and accept a backup offer, and how much time you get to remove the contingency if they do.

The tradeoff: a sale contingency protects you, but sellers often prefer offers without one. A contingent offer is strongest when your home is already under contract, or priced to sell quickly.

What is a bridge loan, and when does it make sense?

A bridge loan is short-term financing secured by your current home that lets you use some of its equity for the next down payment before it sells. A home equity line of credit opened before you list can do something similar.

• Good for: owners with significant equity who want to make a non-contingent offer.
• Watch for: qualifying with two payments, the cost and interest of the loan, and what happens if your home takes longer to sell than planned.
• Ask your lender whether they can count your current home's payment as going away once it is listed or under contract. Rules vary by loan program.

Talk to a lender before you start shopping, not after you find the house. We can introduce you to Utah lenders who do this often.

How do a rent-back and delayed possession work?

These let you sell first and still move once.

• Delayed possession. Section 3.3 of the Utah REPC lets the parties choose when the buyer gets possession: upon recording, a set number of hours after recording, or a set number of calendar days after recording. A few extra days can be enough to move straight from one home to the other.
• Rent-back. For longer stays, the REPC says any rental of the property before or after closing between buyer and seller "shall be by separate written agreement." That agreement covers the daily or monthly rent, the deposit, utilities, who insures what, and the move-out date.

The REPC also says the seller and buyer are each responsible for any insurance they consider necessary, including for personal belongings. Call your insurance agent before closing so your belongings are covered.

How do you time two closings in Utah?

1. Get pre-approved for the new home, and ask how the lender will treat your current mortgage.
2. Prepare and price your home so it is ready to list the moment you find the next one.
3. Write the purchase offer with matching deadlines. Every Utah REPC has four: Seller Disclosure, Due Diligence, Financing & Appraisal, and Settlement. Line them up with your sale.
4. List and accept an offer with possession terms that fit your move.
5. Close the sale first, often the same day or a day before the purchase, so the proceeds can fund the new down payment. Your title company coordinates the timing.

Do you need to buy a more expensive home to avoid tax?

No. Today, if the home you sell was your main home for two of the last five years, you can generally exclude up to $250,000 of gain ($500,000 married filing jointly), whether your next home costs more or less. See our guide to capital gains tax when selling a home in Utah.

A 1031 exchange is for investment property, not your main home. If you are selling a rental and buying another, see our Utah 1031 exchange guide.