Buy Before You Sell
Our unique Buy Before You Sell short-term loan program is designed exclusively for home buyers like you. Our program empowers you to purchase a new home before your old home sells. With our funds at your disposal, you can confidently secure your dream home and move at your own pace.
With our program, we don’t count your existing mortgage payment against you for qualification purposes, you have the option to not make double payments, and you own your new home (unlike competitors that require you to rent it).
We charge a simple 1% origination, along with normal lender fees, when you draw against our short-term loan for your new home purchase. It’s a small cost to pay for the convenience of using our funds to buy before you sell. Once your old home sells you can either pay off our short-term loan or we can refinance you into a long-term conventional loan. Should you choose to refinance into a long-term loan with us, we take pride in keeping your overall costs low by subsidizing your refinance.
How it Works
Find Your Dream Home
Search for your next home knowing that you can make a cash offer.
Make a Cash Offer
Increase your chances of winning the bidding war by making a cash offer using our funds.
Move On Your Schedule
Buy your new home before selling your old one and move when you choose.
Easy to Qualify
Liberal debt to income ratios that don’t count old house payment against you.
Reasons to Buy Before You Sell
No Double Moves
Since you already own your new home, you can choose when to move.
No Double Mortgages
Option to make only one payment for up to three months.
Sell for Top Dollar
Since you won’t be in a rush to sell your old home, you can sell for the highest price.
Win the Bidding War
Making a cash offer will maximize your chances of winning the bidding war.
What Happens After the Loan is Approved?
You and your realtor will receive a Proof of Funds Letter & Instructions.
Approval Email Sample
Mr. and Mrs. Smith,
I am pleased to inform you that your Buy Before You Sell short term loan/line of credit has been approved. We have allocated funds for your new home purchase. These funds can be drawn as soon as the appraisal for your new property is complete. I am attaching a copy of a Proof of Funds letter you can use for your offer.
Your payment on your current home is $1,500 per month and the interest only payment on our short-term line is $3,000 per month (since you will be borrowing nearly the full cost of the new property). Making double payments will eat into you cash and your other reserves, so I suggest you try to sell your current house as soon as possible. I would not risk putting too high of a price on it and risk having it sit on the market.
Realtor Instructions Sample
From the Realtor side of the process, our short term loan/line of credit is just like a normal loan. The key point is that we are able to qualify Mr. and Mrs. Smith to own both homes at the same time since we are lending our own funds for their purchase. When you submit an offer there are three documents we recommend you send to the sellers agent with your offer:
Proof of Funds letter (we also suggest that you provide a bank statement from Mr. and Mrs. Smith to document their 5% down payment and use our proof of funds letter to document the other 95% of the purchase price).
FAQ document (this is intended to be sent to the seller agent to answer their basic questions about our program), and
Addendum/Limited Appraisal Waiver form (this is an amendment to the standard TREC contract we drafted to help Buyer’s agents who are using our program). This document has a limited and full appraisal waiver language for you to use if you want. This addendum also explains how our program works and will hopefully answer any questions the Sellers agent may have about how the contract is drafted. You are fee to use this in your contract, but it is up to you to advise Mr. and Mrs. Smith on the implication of purchasing a new home with a Buy Before You Sell line using a limited or full appraisal waiver.
I am also attaching a flyer that explains our full line of Dominate with a Cash Offer® loan programs and here is a link to our website with more details on our program (https://hurstlending.com/dominate-loans/buy-before-you-sell/). Feel free to share this with the Sellers agent if you think this is helpful.
Please let me know if you have any questions or if I can help in any other way. Hope you get the house!
I’ve worked with Jay Hurst on several loans. Jay is extremely knowledgeable and helpful, and was able to advise me on the options for my recent purchase. Great guy to have on your side, and great rates!
Hurst Lending was very easy to work with and stayed in constant contact with me throughout the loan process so I never had to wonder what the status of the loan was.
Frequently Asked Questions
How do I get started?
It’s quick and easy. Get approved for both a short-term loan and long-term home loan from us in a single step.
What if I can't qualify for the old house payment and mortgage on the new house?
We are lending our own funds for your short term line of credit/loan. We use common sense underwriting criteria that factors in the equity from your old home and use liberal debt to income ratios to enable you to qualify to purchase a new home before your old house sells.
Once I am approved, how do I make a cash offer for my new home?
Use our funds to purchase your new home. We provide you a short-term line of credit/loan to enable you to pay cash for your new home. We will provide you and a proof of funds letter showing that we have funds allocated for you use to purchase your new home.
Can you explain the proof of funds letter?
When we send you a proof of funds letter that means you are FULLY underwritten for a line of credit. This is very similar to a commercial line of credit issued by banks. These funds are FULLY available for you to use to purchase a property. The funds are simply waiting for an executed contract, along with an appraisal and clear title to be released to the purchaser.
Is this truly a cash transaction?
It is! The funds are waiting. The proof of funds letter is as good as if the funds are in your bank account.
From the seller’s point of view, is there anything negative about this transaction?
No. The seller will not have to worry about your loan falling out due to DTI, Job History, Buyer Self Employment, or any of the usual reasons a mortgage loan falls through. The short-term loan/line or credit or cash offer also eliminates the need for contingent contracts. This is a cost-free advantage to the Seller.
How long does it take to close this kind of transaction?
As quickly as we can get an appraisal and clear title. Everything else has been completed and the money is waiting. The line of credit is secured by the new property being purchased.
When can I move into my new home?
You can move into your new home as soon as you close on your purchase using our short term line of credit/loan.
When can I refinance out of the short term loan?
You can refinance your short term loan at any time but most people refinance as soon as their old home sells. In any case, your Short-Term loan must be refinanced or paid off at the earliest of when your old house sells or within 6 months to 1 year depending on the term of your loan.
What is the cost of using our By Before You Sell program?
We charge a simple 1% Origination fee when you draw against your short term loan and the approximate cost to refinance you into a long term loan (after you old house sells) is .25% to .5% in extra fees in many cases related to using Hurst Lending to refinance out of the short term loan.
Am I required to use Hurst Lending to refinance out of the short term loan?
We would love to help you refinance out of our short-term line of credit/loan but this is not required. If you use us for your refinance, we will apply a lender credit to your refinance to help keep you closing costs as low as possible.
Your cash offer will gain attention and rise to the top of the other offers.
Close faster since your fund are secured.
A cash offer removes contingencies and is more attractive to sellers.
Move into your new home on your new schedule.
The Better Way to Buy
Never miss out on the perfect home because you haven’t sold your current one.
Advantages for Buying Before You Sell
We are different from other Buy Before You Sell Companies. Other companies purchase your new home and rent it to you. We are different. We are a Buy Before You Sell Lender, so you always have ownership of both your current home and the home you are purchasing. We simply provide line of credit/short-term loan (or sometimes called a bridge loan) that enables you to purchase your new home with OUR funds before your sell your departing residence. As with the purchase to rent model, and with our model of using a short term loan to purchase a new home before you old home sells, you will need to be prepared to make payments on your old home and the new home.
One significant advantage of being a Buy Before You Sell Lender is that we can help you buy before you sell, and minimize having to make double payments for up to three (3) months while your old home sells. We can do this by simply adding the up to three interest only payments on the back of your loan. This will provide you up to 90 days without having to make a payment on the new home. This gives you time to sell your current house before making a monthly payment. The interest is simply paid back when you payoff the loan in full. This is an optional delayed payment feature.
We do generally require customers have at least six (6) months of funds available to pay for their old mortgage payment and our Buy Before You Sell line of credit/short term loan. These funds are called reserves and can come from flexible places such as: (1) your bank account or investment accounts; or (2) from a 401k loan or an existing HELOC on your old house (please note that a HELOC must be set up before you decided to purchase a new home since HELOC lenders will generally not offer a HELOC if you are planning to move or sell your old home). (3) Even gift funds or a co-borrower. You can also have your Realtor to structure your real estate contract for your new home with a seller concession. A seller’s contribution can be done with raise the final offer by $5k or $8k in exchange for a sellers contribution of this same amount so that you don’t have to bring as much to closing. With all of these options, the key point is to plan ahead and make sure you have more cash on hand than you think you need and to not underestimate how quickly your old home will sell.
We also highly recommend that Buy Before You Sell customers, set the sale price for your existing home in an aggressive manner. But, by executing the buy before you sell, you can move out of your current house, declutter and even stage your home which often allows you to sell quicker and for more than a lived in home. https://www.nar.realtor/blogs/styled-staged-sold/why-staging-matters-even-in-a-sellers-market
Our Buy Before You Sell loan is a great way to help you make the transition to a new home stress free, hassle free, and avoid having to match the date your old house sells with the date your new home closes. No taking the kids and dogs out of the home for showings! That said, you need to protect yourself and have sufficient financial reserves on hand to cover any delays with the sale of your old home. If you have any question about how to work thru these issues when considering a Buy Before You Sell loan, please contact us.
Quick, Easy and Convenient
Move into your new home before your old house sells. Get started now.
About Hurst Lending
We have been helping our customers buy, sell, and refinance their homes since 2006. Our personalized approach to the home buying process includes a suite of services that solve common hurdles in the home buying process. Have you ever experienced the frustration of trying to buy before you sell; Losing your dream home in a bidding war; Trying to get a No-Seasoning Cash-out loan; Being unable to obtain a mortgage because your new or old house needs modest repairs; or simply because you prefer using our funds to close quickly without having to liquidate other investments? Our Industry-leading suite of short-term loans solves these issues. We also offer a suite of real estate investor loan products and a full suite of conventional, VA, FHA, construction and traditional home loans.