Timing is everything and when you are selling and buying a house at the same time you have to ask yourself one question:
Can you buy before you Sell?
If you are in the position to be able to buy a new home without having to sell your old home first that is the best situation to be in. You can shop for your new home at your leisure and when you find it you buy it right away. Then afterward you can get around to listing your previous home and sell it on your own time.
Unfortunately, most buyers are not in the financial position to do this, because the mortgage on the first house counts against your income to qualify for the mortgage on the second house while you own it, and the money for the down payment on the new house usually comes from the equity from the sale of the old house. Basically, only rich people or Downsizing buyers can hope to buy before they sell. Downsizing makes it easier to buy because it lowers the purchase price.
When is it a good idea to USE A HELOC? If you are downsizing a HELOC can be a great option to buy with. For buyers leaving a big city market where prices are substantially higher than suburban communities in an area with milder climate (South Western United States) and a lower cost of living. Sometimes the equity is enough to buy the new home with it. Then you can buy before you sell using a home equity line of credit.
If the seller of the property you want to buy is willing to “Carry the note”, you can take seller financing when buying the first home while you sell the second home. Seller financing is not all that common but tends to resurface in high-inflation environments or during slow markets or rural areas with very low demand – seller carry may be the only financing available to some buyers.