Home Sale Contingency: Can You Buy a New-Construction Home Before You Sell?
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Yes, you can often buy a new-construction home before you sell your current one, but you have to plan how you will qualify and how you will close. A home sale contingency lets you back out if your old home does not sell, yet each builder decides whether to accept one. The other paths are selling first, carrying two payments for a while, or using a short-term bridge loan or home equity line.
What is a home sale contingency?
A contingency is a condition in your purchase contract. If the condition is not met, you can cancel without breaking the deal. The Consumer Financial Protection Bureau (CFPB), in its home-buying guide last updated Dec. 12, 2024, suggests making an offer ""contingent on obtaining financing"" and on ""a satisfactory inspection,"" so you are not forced to buy if those fall through.
A home sale contingency works the same way. It says: ""I will buy this home only if I sell my current home by a set date."" If your home does not sell in time, you can walk away.
That matters most for your deposit. The CFPB's mortgage key-terms page says earnest money is ""returned to the buyer"" if ""the contract is terminated for a permissible reason,"" and ""may be forfeited"" if the buyer does not act in good faith. A contingency is what turns ""my house didn't sell"" into a permissible reason.
Do builders accept a home sale contingency?
Some do and some don't. There is no national rule. Each builder writes its own purchase agreement, and the terms can change by community, by home and by month.
Here is why a builder may say no. A builder who holds a finished or nearly finished home for you is taking that home off the market. If your sale drags on, the builder waits too. Some contracts handle this with a ""kick-out"" style clause, where the seller keeps marketing the home and gives you a short window to drop your contingency if another buyer appears.
The CFPB also tells new-construction buyers to ""ask the homebuilder under what conditions the builder deposit can be returned."" Get that answer in the contract before you sign.
How long do you have to sell while your home is built?
Often more time than people think, if you buy a home that has not been started yet. The Census Bureau's 2025 table of single-family homes built for sale, published in 2026, shows how long they took from start to finish:
Time from start to completion (homes built for sale, 2025) | Share of homes |
|---|---|
3 months or less | 20% |
4 to 6 months | 50% |
7 to 9 months | 19% |
10 to 12 months | 5% |
13 months or more | 5% |
Source: U.S. Census Bureau, ""Number of Housing Units Completed by Number of Months from Start,"" 2025. Percents may not add to 100 due to rounding.
So 7 in 10 of those homes were done within six months of the start (20% plus 50%). That is a real window to list and sell your current home. A quick move-in home is the opposite case: it may be ready in weeks, which leaves little time to sell.
For more on build timelines, see our guide to how long it takes to build a house.
Can you qualify for a new mortgage while you still own your old home?
This is where most move-up buyers get stuck. Your lender has to decide whether to count your old house payment along with the new one.
Fannie Mae's Selling Guide (section B3-6-06, dated Sept. 2, 2026) says that if your current home is pending sale but will not close before your new purchase, ""the current PITIA and the proposed PITIA must be used in qualifying"" you. PITIA means principal, interest, taxes, insurance and association dues.
There is an exception. Fannie Mae ""will not require the current principal residence's PITIA to be used"" if the lender has the executed sales contract for your current home and confirmation that any financing contingencies have been cleared. In plain words: once your buyer's loan is solid, the old payment can come out of the math.
Here is what that difference can look like. This is an EXAMPLE only, using Freddie Mac's 30-year fixed average of 7.40% for the week of Oct. 8, 2026:
EXAMPLE (not a quote) | Only the new payment counted | Both payments counted |
|---|---|---|
New loan: $400,000 at 7.40%, 30 years (principal and interest only) | $2,769.52 | $2,769.52 |
Old home payment (example PITIA) | not counted | $2,000.00 |
Total housing payments counted | $2,769.52 | $4,769.52 |
Share of an example $12,000 monthly income | about 23% | about 40% |
The jump from about 23% to about 40% of income can decide whether you qualify. Your lender will run your real numbers, including the new home's taxes and insurance. Our post on debt-to-income ratio for a mortgage explains how lenders use that percentage.
What are your options if you need to sell to buy?
You have five common paths.
Ask for a home sale contingency. Best when the builder agrees and the home is not finished yet. Read the deadline and any kick-out terms closely.
Sell first, then buy. You know exactly what you have to spend. The catch is you may need a place to live in between.
Get your sale under contract before your new home closes. With an executed contract and your buyer's financing contingencies cleared, Fannie Mae's rule above lets the old payment drop out of qualifying.
Use a bridge loan. Federal rules describe a bridge loan as a temporary loan with ""a term of 12 months or less,"" for example to buy a new home ""where the consumer plans to sell a current dwelling within 12 months"" (CFPB, Regulation Z, 12 CFR 1026.43). Fannie Mae's Selling Guide (B3-6-05, dated Aug. 5, 2026) says a bridge loan counts in your debts unless the lender has the executed sales contract for your current home and confirmation that its financing contingencies are cleared.
Tap a home equity line of credit (HELOC). The CFPB says a HELOC ""lets you borrow money using the available equity in your home,"" usually has an adjustable rate, and that the lender ""could foreclose on your home"" if you cannot pay it back. Its advice: ""Only consider a HELOC if you're confident you can keep up with the loan payments.""
Options 4 and 5 put debt on top of debt. Talk them through with a lender before you count on either one.
Does a home sale contingency affect your rate lock?
It can. A rate lock lasts a set number of days. If you are waiting on your old home to sell and your new home to finish, the clock may run out. Builders and lenders handle long locks in different ways, so ask how long the lock lasts and what an extension costs. Our guide to when to lock your mortgage rate walks through the timing.
What this means for new-construction buyers
Buying new gives move-up buyers one big advantage: time. If you pick a home that has not been started, the build itself can be your selling window. Census data for 2025 shows half of single-family homes built for sale were completed in 4 to 6 months from start.
Here is a simple plan:
Before you sign: ask the builder if it accepts a home sale contingency, how long it lasts, and when your deposit can be refunded. Get it in writing.
Talk to a lender early: ask whether they will count both payments, and what they need to drop the old one (an executed sales contract and cleared financing contingencies, under Fannie Mae's rule).
Match your timelines: list your home so it can close near your new home's completion, not months after.
Have a backup: know whether you would rent short term, use a bridge loan, or tap equity if the dates slip.
Common Questions
What is a home sale contingency?
It is a condition in your purchase contract that says you will buy only if your current home sells by a set date. If it does not sell in time, you can cancel. Because canceling is then a permitted reason, your earnest money is usually returned under the contract terms.
Do new-construction builders accept contingent offers?
Some do and some don't. Each builder sets its own contract terms, and they can differ by community and by home. Ask before you sign, and ask when the builder deposit can be returned.
Can I qualify for a new mortgage before my current home sells?
Possibly, but your lender may count both house payments. Fannie Mae's Selling Guide says both payments are used if your current home will not close first. The old payment can be left out once there is an executed sales contract and the buyer's financing contingencies are cleared.
What is a bridge loan?
It is a short-term loan that helps you buy before you sell. Federal rules describe it as a temporary loan with a term of 12 months or less. Fannie Mae counts it in your debts unless your current home is under contract with financing contingencies cleared.
How long does a new home take to build?
It varies. For single-family homes built for sale in 2025, Census data shows 20% were finished in 3 months or less and 50% in 4 to 6 months from start. That build time can give you a window to sell your current home.
Do I lose my deposit if my home doesn't sell?
It depends on your contract. With a home sale contingency, a failed sale is usually a permitted reason to cancel and get your deposit back. Without one, you may lose it, so read the deposit terms before you sign.
Ready to take the next step?
Call 561-704-0091 to talk with a National House Search specialist, or Schedule a visit.
Related reading: Earnest money on new construction · How long does it take to build a house? · Debt-to-income ratio for a mortgage · When to lock your mortgage rate
This is general information, not financial, tax or legal advice. Figures checked October 12, 2026.