Buying your next home in Lafayette while selling your current one can feel like a high-wire act. You want the right house, the right price, and the least stress for your family. The big question is whether to use a bridge loan or make your offer contingent on selling your current home. In this guide, you’ll learn how each option works, what it costs, how sellers view it in Boulder County, and how to choose your best path with confidence. Let’s dive in.
Bridge loan vs sale contingency
Bridge loan basics
A bridge loan is short-term financing that helps you buy before you sell. You can use it to cover your down payment or closing costs on the new home, then pay the bridge off when your current home sells. Common formats include a standalone bridge secured by your current home, a cross-collateralized loan secured by both properties, or a HELOC used as a bridge if your lender allows it. Lenders focus on combined loan-to-value limits, debt-to-income, credit, reserves, and the marketability of your current home.
Sale contingency basics
A sale contingency makes your purchase conditional on selling your current home within a set timeframe. Variants include a simple sale contingency or a contingency with a kick-out clause. With a kick-out, the seller can keep marketing the home and, if they receive another acceptable offer, you get a short window to remove your contingency. You and your agent will set timelines and terms for removal, inspection, and financing deadlines.
Timeline comparison for Lafayette move-ups
Bridge loan timeline
Prequalification can happen quickly, often within days, then underwriting and closing usually take 2 to 6 weeks depending on complexity and lender process. You can close on the new home while still owning your current one. After you sell, the proceeds pay off the bridge. This route can help you move fast in a competitive neighborhood when the right home appears.
Sale contingency timeline
Your purchase is tied to how fast your current home sells. If your home goes under contract quickly, you proceed on a normal closing schedule. If it takes longer, the purchase may stall or fall through. In a tight market, listing agents may prefer non-contingent offers or insist on a kick-out clause.
Overlap and logistics
- With a bridge loan, you may carry both homes for a short period. This can reduce moving stress since you can move in stages.
- With a sale contingency, you minimize or avoid overlap but risk losing the new home if your sale runs long.
- Possession strategies like a short leaseback to the seller or flexible closing dates can help both paths.
Cost and cash-flow: what to expect
Cost categories
- Upfront fees: Bridge loans often include origination, appraisal, title, and legal fees. Contingency offers usually do not add lender costs, but you may need to make pricing or timing concessions to stay competitive.
- Carrying costs: With a bridge, plan for interest-only bridge payments plus taxes, insurance, HOA, and utilities. If you hold two properties, budget for both.
- Opportunity cost: A bridge can be more expensive than a standard mortgage, but it may secure a rare listing. A contingency can save financing costs but risks losing a desired home.
- Transaction costs at sale: Realtor commissions, closing costs, and any early repayment or exit fees on a bridge if applicable.
- Tax considerations: Mortgage interest deductibility depends on your situation and current tax law. Consult a qualified tax professional.
How to run the numbers
- Estimate your net proceeds from selling your current home. Subtract commissions, closing costs, and remaining mortgage from a realistic market value.
- Estimate your new home down payment and closing costs.
- Calculate the bridge amount needed to cover the gap.
- Estimate bridge costs by adding expected fees and the interest for the months you plan to hold it.
- Add overlapping monthly carrying costs for both properties.
- Compare to a sale contingency scenario where you may face fewer costs but lower offer strength.
Simple illustrative example
- Expected net proceeds from current home: $500,000.
- Target purchase price: $800,000.
- Down payment at 20 percent: $160,000 plus about $12,000 for closing costs.
- Shortfall if you buy first: about $172,000. You could size a bridge for the gap or blend with cash reserves.
- Compare the total bridge interest and fees over, say, 3 months to the potential cost of losing the home to a non-contingent buyer. Have your lender provide exact figures.
Risk profile and how to reduce it
Bridge loan risks and solutions
- Financing risk: If your sale takes longer than planned, costs add up. Ask about maximum term, extensions, and any exit fees.
- Market risk: If prices dip, your sale proceeds may shrink. Price and prepare your home to sell swiftly.
- Liquidity risk: You need reserves to carry both homes. Build 3 to 6 months of payment cushion.
- Coordination risk: Title and payoff timing must align. Use a team that coordinates both transactions closely.
Sale contingency risks and solutions
- Contract risk: Sellers may reject or add a kick-out clause. Shorten the contingency window and increase earnest money to compete.
- Timing risk: If your home lags, you may lose the purchase. Pre-list, pre-inspect, and launch a strong marketing plan to reduce days on market.
- Emotional and logistical stress: Build a backup plan, such as temporary housing or a bridge preapproval as a fallback.
Negotiation optics in Boulder County
What sellers prefer
Sellers usually favor offers with fewer contingencies and faster, more certain closings. A sale contingency signals uncertainty. If inventory is tight, listing agents often recommend non-contingent offers or kick-out protections. A bridge-backed buyer who can close quickly often looks stronger, especially with clear proof of financing.
How to strengthen your position
- If using a bridge: Provide lender preapproval and proof of reserves, and offer a clean, quick closing.
- If using a sale contingency: Shorten the contingency window, raise earnest money, offer a strong price, and be flexible on possession. Consider submitting a backup offer if the seller accepts another buyer.
Lafayette and Boulder County factors to check
Market pace by price band
Ask your agent for current days on market and sale-to-list ratios for your specific price range in Lafayette and nearby suburbs. Low inventory or fast absorption may favor a bridge or other non-contingent strategies. A balanced market may allow more contingencies.
HOA and document timelines
Many Lafayette communities have HOAs. HOA resale documents can add time to closing. Confirm document delivery timelines for both the home you are selling and the one you are buying.
Seasonality, commutes, and calendars
Spring and early summer often bring more listings and buyers. School calendars and commute needs influence timing for many families. Plan your list date, showing access, and closing window around these factors to minimize stress.
Which path fits your situation?
Scenario A: Fast market, must act now
- Profile: Dual-income, good credit, solid reserves.
- Likely fit: Bridge loan to secure the right home, then list immediately.
- Why: Certainty and speed win in competitive neighborhoods. Limit the bridge term and launch an aggressive listing plan.
Scenario B: Balanced market, cost control matters
- Profile: Risk-averse, modest reserves, wants to avoid overlap.
- Likely fit: Sale contingency with a short window and a kick-out clause if needed.
- Why: You save on bridge costs while staying competitive through price and clean terms.
Scenario C: Uncertain market or limited equity
- Profile: Tight CLTV, not bridge-approved, or concerned about price softening.
- Likely fit: Sell first, then buy. Consider temporary housing or a backup offer on your target home.
- Why: You avoid over-leverage and keep flexibility if prices shift.
Step-by-step workflow
Pre-decision
- Request a detailed net-proceeds estimate from your agent.
- Get full mortgage preapproval and ask lenders about bridge options and CLTV policies.
- If considering a bridge, obtain a prequalification letter to show sellers your financing strength.
- Align contingency language and timing targets with your agent.
If you choose a bridge loan
- Compare local lenders on term, rate structure, interest-only payments, fees, and any exit costs.
- Confirm the payoff process and whether payoff can occur at the same escrow as your sale.
- Coordinate title, escrow, and both lenders for clean, back-to-back closings.
If you choose a sale contingency
- Keep the window short and the terms clear. Pair with a compelling price and flexible possession.
- Pre-list and pre-inspect to reduce time to close once you go under contract.
- Consider submitting as a backup offer on your target home if your initial offer is not accepted.
Questions to ask lenders
- Do you offer bridge financing or temporary buy-sell solutions? What are CLTV and DTI limits?
- What documentation is required, and how fast can you close?
- What are the exact fees, and are there prepayment or exit charges?
- How is the bridge secured, and how will payoff coordinate with sale escrow?
Questions to ask your agent
- What are the current days on market and likely net proceeds for my home?
- How do sellers in my price band view contingencies right now?
- Will a bridge prequalification help my offer stand out?
- What is the marketing plan to sell my home quickly once we go live?
Decision checklist
- I know my likely net proceeds and timing to sell.
- I have a clear budget for overlapping costs or have chosen to avoid them.
- I am preapproved for my purchase and, if relevant, prequalified for a bridge.
- I understand kick-out clauses and contingency removal timelines.
- My listing plan includes staging, professional media, pricing strategy, and flexible showings.
- I have a backup plan for temporary housing or possession if needed.
Choosing between a bridge loan and a sale contingency is about balancing certainty, cost, and timing for your family. When you pair clear numbers with a strong local strategy, you can act with confidence and reduce stress from start to finish. If you want a tailored plan for Lafayette and nearby Boulder County neighborhoods, connect with the local, full-service team that handles both the buy and the sell with calm, expert coordination. Reach out to Bethany J Sartell to map your next move.
FAQs
What is a bridge loan for a Lafayette move-up?
- A bridge loan is short-term financing that lets you buy your next home before selling your current one, then pay the bridge off with sale proceeds.
How does a sale contingency offer work in Boulder County?
- Your purchase is conditional on selling your current home within a set period; if you do not sell in time, the contract can be voided or you may face a kick-out.
Which option is stronger to sellers in tight markets?
- Non-contingent offers, including those backed by bridge financing, usually look stronger because they offer speed and certainty.
What are the main costs of a bridge loan?
- Expect origination and appraisal fees, title-related costs, and interest-only payments during the short term you hold the bridge.
How can I make a sale contingency more competitive?
- Shorten the contingency window, increase earnest money, present a clean offer, and show that your current home is ready to list or already live.
What local factors in Lafayette should I confirm first?
- Days on market by price band, HOA document timelines, expected net proceeds, and current seller attitudes toward contingencies in your target neighborhoods.
