Your Buyer Backed Out? How to Still Close on Your Next Home on Time
If the sale of your current property falls through while you're under contract on your next one, you can often still close on time. The usual fix is a bridge loan secured by the equity in the property you were selling, which provides the cash your sale was supposed to deliver. Move fast: tell your agent and lender right away, ask the seller about a short extension as a backup, and get a bridge loan reviewed the same week. In one Marion County case, a buyer walked away six days before closing, and a bridge loan funded in 9 business days.
Key Facts
What to Do in the First 48 Hours
1. Tell your agent and your lender immediately. Every day matters when a closing date is set. 2. Read your purchase contract. Check your financing and sale contingencies, and when your earnest money becomes non-refundable. 3. Find out why the buyer walked. Financing, inspection or cold feet? It affects how quickly you can relist or bring in a backup offer. 4. Ask for a bridge loan review the same day, using the property you were selling as collateral. 5. Ask the seller about a short extension as a backup. Many will agree to a few days, but don't count on weeks.
Which Situations a Bridge Loan Can Fix, and Which It Can't
You needed the sale proceeds for your down payment or to pay cash: usually fixable. The bridge provides that cash now, and your sale pays it off later. Your new loan required the old home to be sold: often fixable. The bridge can let you close without waiting on the sale, depending on how your new loan is structured. Not enough equity in the property you were selling: harder. Bridge amounts depend on equity, so the numbers need a real review. You can't carry two properties for a few months: a bridge is interest-only, but you still need a plan for the payments until your property sells. Want the mechanics, terms and costs? See what a bridge loan is and how it works and bridge loans in Oregon.
Other Options, and Why They're Usually Backups
A closing extension: useful if your property is already back under contract, but sellers rarely give long ones. A home equity line of credit: many lenders won't open one on a property that's listed for sale, and approval can take longer than you have. Borrowing from retirement or family: possible, but it can be slow, costly or complicated. Talk to your tax advisor first. Walking away: can cost your earnest money and the home you chose. Price the bridge before you consider this.
A Deal We Closed After the Buyer Walked
Six days before a Marion County farm purchase was set to close, the buyer of our client's commercial property terminated. The farm closing depended on that sale. We funded a $2,000,000 bridge loan against the unsold commercial building in 9 business days, with no appraisal required. Our client closed on the farm on the original date and paid the bridge off four months later when the building sold. Read the Marion County case study.
What to Do This Week
1. Confirm your closing date and any contract deadlines with your agent. 2. Gather your mortgage statement and any recent valuation for the property you were selling. 3. Estimate your bridge loan with our bridge loan calculator. 4. Call us for a same-day bridge review at 503-966-9255. Next time, consider lining up a bridge before you list, so you can buy without a sale contingency. Facing a different roadblock? See when the bank says no.
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From the Blog
Further Reading
Bridge LoansCommercial Sale Fell Through Days Before Closing on a Marion County Farm — How a 10-Day Bridge Loan Rescued the Deal
A Marion County Oregon commercial property owner had an agricultural purchase under contract — set to close in less than a week — when the buyer on their commercial property terminated and walked. Without the sale proceeds, the ag deal was hours from cratering. A commercial bridge loan funded in 10 days for up to $2,000,000 — matching the projected net proceeds from the failed sale — against the equity in the unsold commercial property (valued in excess of $4,000,000), with no appraisal required and no prepayment penalty — letting them close on the farm on schedule and pay the bridge off in full when the commercial property eventually re-listed and re-sold. We walk through the Marion County commercial market, why contingent and timeline-stacked offers come apart, the bridge loan mechanics that made the rescue possible, and exactly what to do if you're in the same situation.
ResidentialBuy the Horse Property First: How a Sunriver Bridge Loan Closed a $900K Central Oregon Equestrian Purchase Fast
Our clients found a $900K Central Oregon equestrian property with barns, an arena, and pasture, but no house. A standard home loan doesn't work on land with no home, and an ag loan appraisal would have taken too long for the seller's timeline. After reviewing their full financial picture, we used a bridge loan against their free-and-clear Sunriver second home, listed at $1.25M. They were clear to close in 9 days with no appraisal on either property, then sold Sunriver and paid the bridge off in full.
Loan TypesBuy First, Sell Later: How a Tiburon Couple Moved to Healdsburg and Recast Their Mortgage
A real case study: a couple buying a $2.125M Healdsburg home didn't want to sell their Tiburon condo until they moved. We paired a maximum $897,000 conventional loan with a $500,000 pledged asset line their financial advisor arranged, then planned a recast after the condo sale to bring the mortgage to about $300,000 with the same rate and term.