You found a great home in Hopkins, but your current place is not sold yet. Do you write a sale‑contingent offer or use a bridge loan to buy first? It is a common crossroads for move‑up buyers across the west metro.
This guide walks you through how each option works, what it costs, and the risks to plan for in Hopkins and nearby communities. You will see where each approach fits best, plus a step‑by‑step plan to move forward with confidence. Let’s dive in.
Contingent offer basics
A sale‑contingent offer means your purchase depends on selling your current home. The contract sets a clear deadline and spells out what counts as a valid sale or closing. If the sale does not happen by the deadline, you can cancel based on the contingency terms.
Many sellers use a “kick‑out” clause that lets them keep marketing the home. If another buyer submits a stronger offer, you may have a short window, often 48 to 72 hours, to remove your contingency or step aside. You can strengthen a contingent offer with higher earnest money, a realistic deadline, and flexible closing dates.
Bridge loan basics
A bridge loan is short‑term financing that taps your current home’s equity so you can buy before you sell. You repay it when your old home sells or when you refinance into permanent financing. This lets you write a non‑contingent offer, which can help in competitive situations.
Lenders typically look for strong equity in your current home, often 15 to 25 percent, along with good credit and manageable debt‑to‑income. Terms are short, roughly 6 to 24 months, and rates are usually higher than a standard mortgage. Expect origination fees, an appraisal, closing costs, and interest payments until you pay the loan off.
How they compare in Hopkins
In low‑inventory segments of Hopkins and nearby west‑metro suburbs, sellers often prefer offers without sale contingencies. In balanced or slower segments, a well‑structured contingency can be acceptable. Condos and entry‑level homes may move faster than larger or unique properties, which affects both your sale timeline and your offer strategy.
A contingent offer reduces your financial exposure because you are not carrying two homes. A bridge loan boosts your competitiveness by removing the sale contingency, but it adds cost and the risk of double payments if your current home takes longer to sell.
Timelines and costs
- Contingent offer timelines: The contingency window is often 30 to 90 days. After the seller accepts, your closing timeline for the new home follows standard underwriting, often 30 to 45 days, plus the time it takes to sell your current home.
- Bridge loan timelines: Approval can take about 2 to 6 weeks due to underwriting and appraisal. Once approved, you can close on the new home on a normal schedule.
- Cost notes: Contingent offers avoid bridge loan fees but may reduce negotiating power. Bridge loans typically carry higher interest than a standard mortgage, plus origination, appraisal, and closing costs. You will also cover taxes, insurance, and upkeep on both homes until you sell.
Key risks to weigh
- Contingent offer risks: A seller may choose a non‑contingent buyer. If your home takes longer to sell than expected, you might need an extension or risk losing the purchase.
- Bridge loan risks: You may carry two payments if your home does not sell quickly. If you reduce your sale price to attract buyers, you could have less equity to pay off the bridge loan. Qualification for permanent financing after closing also matters, so plan ahead.
Hopkins market implications
Hopkins and the west‑metro have micro‑markets that move at different speeds. Well‑priced homes near transit or downtown amenities may draw fast interest. Larger, unique, or highly customized properties can take longer to find the right buyer. Your price band and property type will guide whether a sale contingency is likely to fly or if a non‑contingent offer gives you the needed edge.
Work with your lender early so you know if a bridge or HELOC option is realistic. At the same time, get a clear sale timeline for your current home so your offer terms align with local demand.
When each option fits
- Best for contingent offers:
- You want to avoid carrying two mortgages.
- Your current home is market‑ready with strong comparable sales and competitive pricing.
- The market is balanced or slow in your target price range.
- Best for bridge loans:
- You have substantial equity, strong credit, and reserves to cover two payments temporarily.
- You are competing in a hot segment where sellers favor non‑contingent offers.
- You want the flexibility to close quickly.
- Hybrid and alternatives:
- HELOC or cash‑out refinance can be a lower‑cost way to bridge equity if your lender allows it.
- Consider rent‑back arrangements to align move dates.
- Strengthen a contingent offer with higher earnest money, defined timelines, and fewer contingencies where appropriate.
Practical step‑by‑step plan
- Talk to lenders early:
- Get pre‑approved and request written term sheets for bridge or HELOC options, including fees and reserve requirements.
- Confirm how two housing payments will be treated in your debt‑to‑income.
- Ready your current home:
- Get a market analysis and realistic time‑to‑sell estimate.
- Prepare staging, photography, and pricing strategy before you write offers.
- Stress‑test your budget:
- Add up two‑payment costs: interest on a bridge or HELOC, property taxes, insurance, utilities, and maintenance.
- Decide how many months of reserves you can carry.
- Set your contract strategy:
- For contingencies, define deadlines and whether a kick‑out clause may apply.
- For bridge loans, include proof of funds or a lender commitment to reassure the seller.
- Line up your closing team:
- Ask your title company about any liens or recording needs tied to bridge financing.
- Start appraisal steps early to avoid delays.
- Plan your exit:
- Map your payoff strategy for the bridge loan, either sale proceeds or a refinance.
- Build in pricing flexibility if market time runs long.
Example Hopkins scenarios
- Entry‑level condo move‑up: You own a well‑priced condo that should sell quickly. You prefer to avoid two payments. A sale‑contingent offer with a defined deadline and strong earnest money could work in a balanced segment.
- Multiple‑offer single‑family: You are targeting a popular Hopkins bungalow where listings draw multiple offers. You have 20 percent equity and solid reserves. A bridge loan or HELOC can help you write a non‑contingent, faster‑closing offer.
- Unique property sale: You are selling a larger or highly customized home that may take longer to find the right buyer. A contingent offer may be challenging. A bridge loan gives you time to market your home properly while securing the next place.
How we can help
You do not have to choose alone. With thoughtful pricing, professional presentation, and a clear financing plan, you can move up with confidence. If you want help aligning the sale of your current home with your next purchase in Hopkins or the west metro, reach out to Karin Rice Duncanson for a local, high‑touch strategy.
FAQs
Will sellers accept a contingent offer in Hopkins?
- It depends on your price range and current inventory. Competitive segments often favor non‑contingent offers, while balanced or slower segments may accept a well‑structured contingency with clear deadlines and strong terms.
How much equity is needed for a bridge loan?
- Many lenders look for roughly 15 to 25 percent equity in your current home, along with good credit, reserves, and the ability to handle two payments for a period.
How long does bridge loan approval take?
- Approval often takes 2 to 6 weeks due to appraisal and underwriting. Starting early helps you make a stronger offer when the right home appears.
Which costs more, a contingent offer or a bridge loan?
- Contingent offers usually cost less in fees, but may reduce negotiating power. Bridge loans add higher interest and fees, yet can help you win in multiple‑offer situations.
What if my home does not sell after using a bridge loan?
- You may need to carry two payments longer, adjust your list price, or refinance to pay off the bridge loan. Budgeting for several months of reserves lowers this risk.
