When there is one buyer, there are others.

"Number 1, we will never make an offer on another house that isn't condition on our sale. Ever. Number 2, we will never assume that someone will get approved for financing, even if the house they're buying is $100K less than the average house price in the city and rates are 3%. "

#2 certain is sound, but #1 is really just a matter of what your personal finances will allow. eg if you own your current home outright or if you can swing 2 mortgage payments at once.

I think that the lesson you really should have learned here is that to never go shopping without money in your pocket.

If you want to move, then sell your house first. If you can't easily afford two mortgages, then don't buy a second home while you still own the first in any form. Yes, it's more hassle to sell and move to a rental and then househunt, but it's the much more financially secure way of buying a house unless you have a high income that can easily take care of two house notes.

Hollysprings, surprisingly, that's not something I would change. We were looking for a home with specific features and inventory was very low. If we sold first, we would have had to either impose on family for God knows how long (and with 2 kids - one being an infant, a dog, and a cat, that wouldn't have been very nice of us), or use a short term rental (and at approx. $600/week, we're better off paying 2 mortgages!)

Whatever you do I wish you the best.

Find a 12 month rental while you look for a home. And then break the lease when you close on the new home. You lose your security deposit but it sure beats the other options.
Shame on your agent to try to predict the future as far as when your house would sell.
Where is it that the market is so hot?
Good luck.

Note about renting for 12 m and breaking the lease if you find a house to buy ... In some states the landlord can go after you for the balance of the lease - so you could be on the hook for however many months of rent. It's not too hard for a landlord to get a judgement against a renter who leaves, so it hits your credit report (and in some industries that can affect your employability).

I only know this because it happened to a sibling who broke a lease.

We're in Ontario, Canada (just north of Toronto), and the market is still pretty insane here. We didn't have it as rough as our neighbours to the south.

We have friends of our daughter who owned small house in DFW TX area. Husband got job transfer to FL about 2 yrs ago...the market in DFW was still decent but FL was soft, really soft...
They went to look--found house close to our daughter which was really nice since they have been BFF since 5th grade...
they put contingency contract on the house in FL and the sellers were desparate...they had already taken job in other part of FL and had house on market for months w/no offers...
Our friends got offer on their home for almost asking price--and the buyers basically had no contingency--were paying cash...they were Middle Eastern and parents were helping them apparenlty...their agent was squirrelly and a real PITA...
Our friends were supposed to close in DFW then close in FL--the husband was working there and living with our daughter while the wife and son were still in DFW...
When it came time to close the buyers of their house couldn't close because their money had not been in a US bank for 30+ days...money has to be on deposit and verified for that time for various reasons...

SO our friends could not close in FL--
they had to apply for their financing as well because their loan was only guaranteed for specific time--and wouldn't extend...
the buyers lost their earnest money since it was their fault they couldn't close...they still wanted the house though so they persued buying it...

our friends managed to extend with the FL sellers at same price becuase they had no other offers knocking on the door...
They did eventually close both houses--
and because they had to reapply our friends were able to get a lower mortgage rate than their first one--and they had the earnest money to use to pay for the new fees and stuff...
so all in all, they made out pretty well...
but they were just lucky...in different market their buyers could have walked away and looked for another home or they could have lost the house in FL if the sellers had been in different situation...