Simply means you have a house to sell and that you cannot buy another until you have sold yours. Or in other words, you are making an offer to a seller subject to the sale of your home.

This is the least desirable situation you can be in as a buyer. It gives you little or no negotiation room and offers you little or no clout as a buyer. Many sellers will not even consider contingent offers because they do not want to remove their home from the market while they wait in anticipation of your home selling. After all, they do not know what condition your home is in, whether it is priced to sell, or if it is in a desirable location. All key factors when selling a home.

If you must sell your home in order to purchase a home, (the majority of homebuyers must do exactly that), it is important that your home is already on the market, even better if you had a pending offer on it. Remember that it is much easier to find a home of your choice than to sell yours. It is simple mathematics. You are offering one style, one property and you must find a buyer who wants exactly what you are offering. On the other hand you are able to view many, many styles and properties, to choose which one is exactly right for you.

The other advantage is the closing date. Once your home has a pending offer, you know your closing date. When you find your dream home, you simply set the closing date for the following day or two and you will be able to cover your closing costs and down payment from the sale of your home, eliminating the need for a bridge loan. Remember, you must have the cash at closing. Cash that is coming from the sale of your home.

BRIDGE LOANS! What are they and how do they work?

The other option that may be available to you is a bridge loan. This is a tool used every day by contingent buyers. They are simple, easy and cost you absolutely nothing unless you execute it. A Bridge Loan can protect you in the event another buyer tries to "bump you out". They basically loan you money against the equity to cover closing costs of your new purchase until your home sells. Then you reimburse the lender with the proceeds from the sale of your home.