Buying and Selling at the Same Time in Alberta: Timing and Financing Questions

Put the two transactions on one page

Selling one home while purchasing another creates two sets of deadlines and one household budget. The easiest mistake is to discuss the sale price and the new mortgage while leaving the gap between them unexplored.

Start with a single timeline showing your planned listing date, condition deadlines, both closing dates and both possession arrangements. Beside each date, identify which money is needed and where it will come from. A deposit due on the purchase may arrive well before the proceeds of your sale. Ask your lender and lawyer to confirm the funding sequence before committing to dates.

Compare three workable sequences

Selling first gives you an agreed sale price before you make the next purchase, once the sale reaches the relevant stage. It can also create a housing gap. Price temporary accommodation, storage and a second move rather than assuming you will immediately find a suitable property.

Buying first may give you more time to choose a home, but it can expose you to overlapping ownership costs and uncertainty about your sale. Test the budget against a slower sale and a lower net result than you hope for. Ask your lender whether the purchase is affordable and approvable under that scenario.

Closely aligned closings can reduce overlap, but they require coordination. Ask your lawyer what happens if incoming sale funds are delayed. Even when the dates look tidy, transport, key release and the availability of cleared funds need separate plans.

Ask exactly what bridge financing would cover

Bridge financing can provide short-term access to equity needed for a new purchase before sale proceeds are available. Qualification is lender-specific. RBC's published guidance, for example, says a firm sale agreement must be in place for its bridge loan and warns that costs and conditions vary. Treat that as one lender's stated requirement, not a promise that any unsold property can be financed.

Before relying on a bridge loan, ask:

• Must the sale be firm, and what documents establish that?
• What amount is available after the lender's deductions?
• Which dates and maximum overlap will the lender approve?
• What are the interest calculation, administration and legal costs?
• What happens if the sale closes late or fails to complete?
• Are additional security or registration steps required?

Obtain answers for your actual transaction. A general conversation about eligibility does not settle the final approval, amount or funding conditions.

Sources: RBC Royal Bank, Bridge financing

Check the existing mortgage before choosing the next one

A portable mortgage may let you transfer your existing balance, rate and terms to another property. FCAC advises borrowers to check eligibility and restrictions with their lender. Portability should not be assumed simply because you are staying with the same bank.

Ask how timing, a larger borrowing amount or a different property affects the option. Compare the complete cost with breaking the existing contract and arranging new financing. FCAC notes that breaking a mortgage can involve a prepayment penalty and other fees; request a written estimate tied to your expected payout date.

Sources: FCAC, Choosing a mortgage; FCAC, Breaking your mortgage contract

Work from net proceeds and a fallback plan

Use expected net sale proceeds in your purchase budget, rather than the headline sale price. Have the relevant professionals estimate mortgage payout, agreed selling charges, legal costs and adjustments. Keep an accessible reserve for expenses that arise before closing.

Finally, agree on a fallback with your household. Would you accept temporary housing, a different possession date or a longer search? Which option is financially manageable? Clear limits make negotiations less stressful. Bring the combined timeline to Marian Dycoco, your mortgage professional and your lawyer so each can address the part they are qualified to advise on.