How To Time the End of Your Lease When Buying a House

When you’re trying to buy a home, leaving your current living situation becomes part of the equation. For renters, that includes what to do with your lease. After all, you’ve signed a legal contract with your landlord stating you’ll live and pay rent there, usually for at least a year. Juggling the timing of your lease with the homebuying process – including the seller’s own timeline and their future living arrangements – can seem tricky, if not impossible. But it can be done.

Sixty-five percent of first-time home buyers in 2024 were renters, according to data from the National Association of Realtors — and 23% of them said they had very little choice in the timing of their home purchase. Still, the more you know about navigating the end of a lease and the beginning of homeownership, the better prepared you’ll be for the transition.

Here’s how experts say you should time the end of your lease when buying a house, plus alternative ways to manage the switch. We’ll also go over problems that could throw a wrench in your plans and how to prepare for them.

The Homebuying Timeline

It’s easier to plan for timing your lease if you know how long to expect the homebuying process to take. One simple guideline: Give yourself enough time between the start of your home search and the day you need to give your landlord notice. That includes time for your mortgage application, home shopping, the bidding process, and underwriting.

According to Lauren Cozzi, manager of media and communications at the National Association of Realtors, buyers spent a median of 10 weeks searching for a home in 2024. Add about a month for mortgage underwriting and you’re already well past three months from the start of your homebuying journey. Four months is an optimistic timeline; five or six months from touring your first home to making your first mortgage payment is a bit more realistic.

Here’s how it breaks down.

Of course, this estimated timeline can vary greatly depending on the kind of real estate you’re buying, where you’re looking to purchase, and even your financial situation, which can affect the speed of the underwriting process. The process may take longer if you’re using a more rigorously underwritten mortgage loan, or it could be faster if you bid on the first home you visit and your offer is accepted right away.

For example, if you’re purchasing a home in a New York City co-op, the ideal buffer time is about four to six months from the start of an “earnest search” for a home, says Alana Lindsay, an agent with Coldwell Banker Warburg in Brooklyn.

“This allows buyers to have the time to search for a home, get into contract, have the board package reviewed, and have a closing date set, all before they have to move out of their rentals,” she said. “Planning this far in advance of the lease end date also ensures that there is enough time to put in place contingency plans like staying with their parents or a friend should the closing be delayed, etc.,” she said.

“Doing this will help to reduce or eliminate the amount of time spent paying for both rent and a mortgage at the same time.”

Common Delays To Watch Out For

If there’s anything you should be prepared for during the homebuying process, it’s surprises. Real estate agents and mortgage lenders will tell you that anything and everything can (and will) happen during your homebuying journey, so it’s best to build in at least a little bit of a buffer.

“Starting a home search too late and only having two to three months or less to find a place until your lease ends is a recipe for disaster,” Lindsay said. “This could leave you having to splurge on a short-term rental or imposing upon family or friends to stay with them at the last minute due to not enough time and planning in advance.”

Some of the problems that could add days or weeks — or even longer — to your homebuying timeline include:

• Financing and underwriting issues

• Inspection problems

• Appraisal mismatches

Keeping in close contact with your real estate agent and mortgage lender can help you be ready to handle surprises as soon as they crop up.

9 Strategies for Lining up the End of Your Lease With Closing

Now that you have an idea of how long the homebuying process could take, you can prepare some strategies that will help you get the timing right.

Your very first step is to re-read your lease so you know what you agreed to and what options you have. Your rental agreement should state whether you can break the lease and what the penalties will be. Your lease may have a home-buying clause, which allows you to break a lease when buying a home as long as you give your landlord sufficient notice.

Once you know what your lease contains, you’ll be able to decide which of the following tactics will work best for your situation.

1. Break the Lease

One option is to simply break your lease, which means leaving your rental before the end date. However, be prepared to pay a hefty penalty fee, which could run several thousand dollars, or about one to two months’ rent. Rules on breaking leases vary by location; in some areas, the landlord may require you to pay out the rest of the lease entirely.

2. Go Month-to-Month

One of the most common options is to talk to your landlord about switching to a month-to-month lease. In other words, instead a year-long lease, you’d switch to a lease that renews automatically each month, with no set end date. When you’re ready to close on the home, you’ll give your landlord notice – typically at least 30 days, or whatever is stated in your agreement.

3. Sublet the Rental

If your lease allows it, you may be able to sublet your rental instead of breaking the lease. That involves finding a qualified renter to take your place.

“If you don't live in a place where breaking a lease works, advertise the apartment or hire an agent to do it,” said Bill Kowalczuk, licensed associate real estate broker with Coldwell Banker Warburg. “Make sure you get a new tenant that will pay the same or more. In both cases, you may have to pay a penalty,” he said.

You’ll typically need your landlord’s permission to sublet. Again, the rules on this vary depending on where you live.

4. Ask for an Extended Close

If the seller is amenable, you might have your agent ask them for an extended close, which pushes back the timeline of the closing. That could give you a little extra time to finish out your lease and prepare for the move.

Keep in mind that some sellers need their property to close quickly so they can apply the proceeds to a new home, so they may balk at the idea of an extension.

5. Ask for Help with Closing Costs

If you decide to stick with the original closing timeline, you may consider asking the seller for help with closing costs. That could free up some of your savings to pay for an extra couple of months of rent. Some sellers may be more willing to help with closing costs if you negotiate a higher selling price.

6. Pay Rent and Mortgage at the Same Time

You might have to bite the bullet and accept a less-than-ideal overlap of your new home and old home. That could mean paying both rent and mortgage for a time, until your lease runs out. It’s expensive, but this option keeps your closing on track and avoids fees associated with breaking a lease.

As mentioned, your first mortgage payment isn’t due until the first of the month following the first full calendar month after closing. This means you could pay rent for one of two months without overlapping with your mortgage payment.

7. Offer a Seller Rent-Back

In some circumstances, this option could be a win-win for both parties. A rent-back is where you, the buyer, negotiate an agreement to rent your newly purchased home back to the seller for a period of time – usually just long enough for them to find their next living arrangement. It would allow you to finish out your current lease while also mitigating the cost, since you could offset your mortgage payments with rent from the seller. Be sure to let your lender know that this is your plan, and consider talking with a real estate attorney who can help you draft an agreement that protects you.

8. Negotiate With Your Lender

Speaking of lenders, you may want to consider talking to your lender. It’s possible that you could arrange to delay your first mortgage payment by a month or more, which would ease the financial strain of overlapping mortgage and rental payments. They might agree to the deal in exchange for a fee or additional interest charges; it depends on the lender.

9. Store Your Stuff, Stay Elsewhere

If your lease runs out before you can take possession of your new home, consider staying with family or friends and storing your possessions. Although it would involve moving twice – once from your rental to the storage unit, and later from the storage unit to your new home – this method could be more affordable than a short-term lease. Plus, it lets you offer additional flexibility to the seller.

How To Talk to Your Landlord About Leaving

When it’s time to broach the subject of leaving, the best practice is usually to communicate early and often with your landlord. Offering to help them find another tenant could help smooth your transition and keep on good terms.

“I’ve watched renters negotiate with landlords — especially if the unit is in a desirable location, and it is a re-rental market that is in the landlord’s favor,” said Andreis Bergeron, vice president of sales at Awning.com, a short-term rental management company. “In another instance, a client in Austin got their landlord to waive the final two months of rent, since the client had a friend who was prepared to take over the lease,” Bergeron continued. “The landlord did not lose a single day of revenue, and my client was able to close on their new home without overlapping costs for housing. That kind of win-win is more likely when tenants approach the conversation early and bring a solution to the table,” he said.

If you’ve reviewed your lease, you should know how much notice you need to give your landlord ahead of your exit. Make sure you put your notice in writing and save a copy for yourself, too. If you and your landlord come to a new agreement that differs from what’s stated in your lease, make sure you both sign the new paperwork.

Some Overlap Isn’t the End of the World

Unfortunately, some overlap may be inevitable when you move from being a renter to being an owner.

“It is all about timing,” Kowalczuk said, “but in real estate, you can’t time things down to the hour you close. Life gets in the way, and not everything goes smoothly. It's impossible to control both sides of the deal.”

However, if you plan carefully, you can minimize some of the financial impact.

“Consult with your buyer's agent,” advised Lindsay. “They are your project managers and will tell you just how much time you will need for your search. Listening to them and hearing how they explain the buying process will help you evaluate your next steps and where you are in the process,” she said.

“This is key to ensuring you do not end up having to pay both mortgage and rent for an extended period of time.”