Ron,

My answer is from the perspective of that of a Buyer's Agent. My advice would be that you will always be a stronger buyer if your offer doesn't contain a contingency for selling another home first. In other words, buying a house with a contingency of selling another or taking on the debt load of another house payment makes you a weaker Buyer in several ways. Look at it this way, if you find a house you just cannot live without, your emotions will cause you to make a less attractive deal especially when you factor in the "bridge" financing of two homes. You'll end up taking less for the first home in a market like today's, and paying more for the new home though a higher interest rate and the high likelihood of carrying two homes for a lengthy period of time.
A better solution is to market the first property and make the best deal you can. If you get the money you expect from this sale (even if you have to move immediately to a temporary residence with a month to month lease while you search for the next home), you will be farther ahead in the long run.
To sum up....sell first and then go out and find the home you want. Then negotiate, negotiate, negotiate from the position of financial strength without contingencies that weaken your offer. You'll receive a better interest rate from the lender, a better price from the Seller, and you will be happier in the end.
Barry Suttles – Realtor
Manager New Homes Group
Kline May Realty
540-246-5666 Mobile Anytime
Barry.Suttles@KlineMay.com http://www.BestValleyHomes.com

Ron,

Have you talked to your realtor? I cannot imagine that any realtor would suggest to their client to own 2 homes hoping that 1 will sell! Unless you have to move NOW for a job or you have tons of extra cash - DON'T! This is not the market to move on to your new house, go deeper into debt and hope that all will be ok. Anyone that tells you otherwise is simply looking for the commission in their pocket and not looking out for your best interest. Sorry to be so harsh but I would never suggest this to my clients. Even writing a contract with a contingency clause regarding the sale of your existing home is dangerous.

Imagine - you look for a new house. You find the house of your dreams and you put together a contract with a contingency to sell your existing house first. You have 3 months to sell your house and close on the new house. 2 months go by and your house is still not sold. You start to panic! You are afraid that your house will not sell and you are terrified that you lose the house you want so bad!

Do not do it to yourself unless and I said you have to move for work or you have plenty of extra cash. DO not do it to your pocketbook and do not do it to your state of mind.

There will be plenty of homes to choose from once your house is sold and you will have a clear head to buy the right house for the right price knowing you can move right in.

Best of Luck,
Linda J Sears

Either way can work. There is a risk with the bridge loan....you end up carrying two payment till your sells. You can make the contingent offer based upon the sale of your home. Best advise is to talk with your lender and tax person to see if the bridge is the best way to go.

Ron,
Depending on your market, that can be a big risk. Before you pull that trigger, make sure your Realtor is doing all he can to get your current home sold. Most important make sure it is priced to sell next in your neighborhood.
Your question is your answer " What about just putting into contract--purchase dependent on sale of current residence". Again if you are in a real strong market OK, otherwise make it contingent.

If I have a client who is trying to sell their house and have found the "perfect" home to move into - we make the offer on the home they wish to purchase - contingent upon the buyer Selling and Settling on their current house.
We also put in a "kick-out" clause (to be fair) stating that buyer and seller agree to allow seller continue marketing their property for sale, and if another bona fide offer comes in, the seller would give the buyer 72 hours to take the home sale contingency off the contract.

A bridge loan is fine if you can afford 2 mortgage payments...

Ron,
I suggest that you talk to your lender and see what he/she suggests. A bridge loan may be the best thing if your debt to income ratio will allow it. Your lender will know what your finances look like and can help you make the best fit.