Three tips to help you overcome hurdles associated with contingent offers.

Are you in the exciting process of finding your dream home, but facing the dilemma of needing to sell your current home before making the next big move? You're not alone. The prospect of juggling two mortgages can be daunting for most, making selling before buying a common choice. In today's dynamic real estate market, this strategy often labels you as a contingent buyer, presenting both challenges and opportunities. If you find yourself in this position, fear not – here are three valuable tips to enhance your chances of success.

1) Offer a compelling price and earnest money deposit. The first tip is the most apparent: make your offer irresistible by presenting a competitive price. While this might seem straightforward, it's crucial to assess the market trends and pricing strategies in your area. An attractively priced offer can set the stage for a positive negotiation process and enhance your chances of winning the deal.

Moreover, consider supplementing your offer with an earnest money deposit that exceeds the average. A substantial earnest money deposit demonstrates your genuine commitment to the purchase, showcasing your determination to make the transaction happen. Sellers are more likely to take your offer seriously when they see your financial dedication.

2) Compete with favorable terms. In a market characterized by multiple offers, where contingent offers may not always be received warmly, the terms of your offer can tip the scales in your favor. Competing with favorable terms can make your offer stand out even if the monetary offer isn't the highest.

For instance, flexibility in your offer's terms can work wonders. A real-life scenario shared by a colleague illustrates this point: a seller chose a lower offer over a higher one due to the flexibility and accommodating terms provided by the buyer. Demonstrating your willingness to adapt and negotiate can sometimes outweigh a higher bid.

“Navigating the real estate market as a contingent buyer can be both challenging and rewarding.”

3) Embrace the bridge loan solution. Breaking free from the contingent buyer label is possible with the strategic use of a bridge loan. This short-term, interest-only loan enables you to transition into a non-contingent buyer, granting you the advantage of a stronger position in negotiations.

The concept is straightforward: a bridge loan provides up to 80% of your current home's value, minus your existing mortgage balance. Suppose your home is valued at $400,000 and your mortgage balance is $220,000. In that case, a bridge loan could offer you up to $100,000 to facilitate your purchase, with consideration for closing costs and short-term interest.

While bridge loans do entail costs, the potential benefits often outweigh them. This approach levels the playing field, aligning you with non-contingent buyers and increasing the likelihood of your offer being accepted.

If you're intrigued by the prospect of a bridge loan, we're here to support you. We have established relationships with lenders offering bridge loans and can help you connect to explore this promising option. When you're ready to take the next step, we're here to guide you through the process and empower you to make informed decisions. Reach out by phone or email.