It depends. In most cases it is best to sell before buying. However, the seller will need to have a place to stay or rent until a replacement home is found and escrow has closed on the house that is being sold. Following are options to consider:
When listing the home ask for a rentback for 15, 30, or more days. It is customary for the seller to pay the buyer (new owner) a per diem based on the new owner's mortgage payment, property tax and hazard insurance (or p.i.t.i.). Example: monthly p.i.t.i. payment is $3500, divide by 30 days in a month = $116.67 per day.
Do a simultaneous close of escrow (simultaneous transaction). Sell your home contingent on closing escrow on your replacement home, and make your offer on your replacement home contingent on closing escrow on the home you are selling. Success of this method is partly dependent on the type of market we are currently in, and it works best in a seller's market. It also depends on whether the buyer of the home you are selling is okay with the contingency, and whether the seller of the home you are buying is okay with the contingency. I will be glad to go over this with you. When a seller with the listing wants to buy a replacement home, the seller of the replacement home will prefer the following (in preferential order): 1. The home being sold is in escrow. 2. The home is listed on the MLS. 3. The home will soon be listed on the MLS. If the house is listed on the MLS the seller of the home to be purchased will usually want to have a copy of the comps and other information, to be sure the seller of the house being sold is priced right, so it will be sold fairly quickly.
Take out a bridge loan to finance the replacement home the seller is buying until escrow closes on the seller's home. A bridge loan is not recommended because of the high cost, but sometimes it is the only way to accomplish a simultaneous sell and buy.
CA BRE #01729313