Bridge Loans - does your state have them?

Recently I had a very well qualified young couple interested in buying a home.  They had a house to sell in another state so we were writing a ccontract contingent on the sale of their home in that  state.  They were easily prequalified for the home that they were making the offer on.  I explained to them that if their contract was accepted with the home sale contingency most likely the sellers would have a drop dead date and require that the home still be shown with a kickout.  My buyers did not have a problem with this, because they were buying the new home at a price where if the kickout was exercised they would be able to afford a bridge loan to tide them over until their current home sold.  Thus they would not lose the house, but would not have two payments unless another offer came in, at which time they would take out the bridge loan.  Sounds like a win win situation.

The problem came when I suggested that they go on and get qualified for the bridge loan as well as the regular financing so that if another offer came in they would be able to perform within the kickout period.  However when their lender started to put this in place she discovered that the state where their origional home is does not allow bridge loans.  Bridge loans are state specific.

My clients have gone ahead with the contingent contract, priced their current home aggressively and we are keeping our fingers crossed that their home sells quickly.

Moral: do not assume that your clients will be able to get a bridge loan just because they are well qualified financially.  Some states do not have them.

Pam Dent, e-PRO, SRES
Charlottesville, Virginia
Real Estate III
www.JumpintoGreenerPastures.com
www.Charlottesville.virginiablogpage.com