I'm in agreement with Eric but it really all depends on your financial situation. If you can purchase without having a home sale contingency attached to your offer you have fantastic buying power right now and should get a great deal on whatever home you pursue. On the flip side when it comes time to sell you unfortunately will probably not get as much as you want or think you will get.
The lending institutions have tightened and it is difficult (not impossible) to get a bridge loan or second mortgage, even if well qualified. I would suggest your first step be to obtain a market analysis on your current home to find out where it might sell. Then sit down with a lender and go over finances and see where you stand.
You can take out two mortgages. People do it a regularly for second or vacation homes. You will just have to qualify for the second mortgage just as you did for the first. But, you'll still have the first, so you need plenty of income to support 2 mortgages.