Everyone that needs to sell in order to buy wants to have their next house picked out before they put theirs on the market. Unfortunately, even in this market it is nearly impossible to get a seller to take an offer with a sale contingency. While it may give you a comfort level to have your next dream home chosen, the odds of being disappointed are high.
The best way to approach this is to meet with a few local Realtors and choose one that you have confidence in. Set up a meeting at their office initially to go over the entire process. Have all questions ready and bring anyone along that is going to have influence in the decision making (spouse, mom, dad, rich uncle louie!) This will insure that everyone is on the same page before the process starts.
Have the Realtor set up a time to view the property that you want to list. This will give them a better idea of how your home compares to comparable homes that have sold recently. Having the correct listing price should get you an offer quickly which will allow you to know at what price point you should be looking at for your upgrade or downsize.
You will be looking at potential homes and may have a short list of desirable properties but it is best to have a pre-planned living arrangement in the event of a quick sale. If this can't be arranged you need to make sure that your offer is contingent upon you finding suitable housing. Most buyers want to get in quickly but you can try to push the closing date off a week or two in order to get you more time to find the right home.
I try to encourage my buyers not to have the closings on the same day. ideally you want to close on your sale on one day and your purchase the next. This allows any last minute problems to be taken care of and will make for a less stressful transaction.
While the whole industry seems to be focused on the first time home buyers, there are many of you out there that are ready to downsize or have outgrown you first time purchase and want to take advantage of the lower market prices on an upgrade. Obviously a lot depends on when you bought and how much equity you have in your current home. If you can swing it, now is a great time to be purchasing a home!