In our local housing market, the competition between buyers is fierce. Sellers are often receiving multiple offers on their home listings and get to pick the best of the bunch. Depending on the offers and the seller’s goals in selling, the seller may have more to consider than just getting the most for their home. This is why a bridge loan might be just what you need to get your offer accepted.
A Sellers Predicament
Many sellers are looking to sell and buy another, and they need the cash from that sale to close on their purchase. Sellers may then also be prioritizing offers that have the least amount of contingencies. A contingency is a stipulation in a contract that would allow for a person on a contract to get out of fulfilling the terms of the agreement in certain situations. For instance, a buyer who currently owns a home and needs to sell it to buy another house would have a contingency to sell their home to fulfill their contract to buy the home from the seller. Many sellers faced with multiple offers may prefer a buyer without a contingency to sell their home because who can say how long that would take.
Time To Use the Bridge Loan
For this very reason, a prospective home buyer may want to consider researching and getting qualified for a Bridge Loan. A bridge loan can allow for a buyer to get home financing by cross-collateralizing their current home and the new home all in one loan.
Essentially, if there is sufficient equity in the house they are selling, the lender will wrap a loan around their current home and the new one so the buyer can close on their original home purchase without delay caused by having to sell their existing home.
An additional benefit of this type of buy and sell strategy is that the homebuyer doesn’t have to rush to sell. They can take their time to move out, stage and put their home’s best foot forward to get the best price on their home.
The biggest pain buyers express to me is the constant worry of a buyer wanting to view their home and the seller needing to keep the place spotless. When you have kids, that can be hard to keep up for the several months it may take for the right offer to come in.