Trying to buy in Preston Village before you sell your current home can feel like a puzzle. You want the right house, but you also want a safe, cost‑aware plan that keeps your move smooth. In this guide, you will learn how a bridge loan and a contingent offer compare, how each works in North Carolina, and which path tends to fit Preston Village buyers and sellers. You will also get checklists and negotiation tips you can use right away. Let’s dive in.
What is a bridge loan?
A bridge loan is short‑term financing that lets you use your current home’s equity to fund the down payment and closing costs on your next home. You buy first, then sell, which allows you to write a non‑contingent offer on the Preston Village home you want.
- Structure: Often interest‑only for a few months, then paid off when your current home sells or when you refinance into a long‑term mortgage.
- Security: Usually secured by your current home’s equity, sometimes as a second lien.
- Qualification: Lenders review your credit, debt‑to‑income ratio, combined loan‑to‑value across both homes, and your plan to sell.
- Costs: Higher interest rates than a standard mortgage, plus origination, appraisal, and closing fees. Some programs have prepayment penalties.
- Timing: Terms vary by lender, commonly up to 12 months.
Local note for North Carolina: Closings typically involve an attorney or settlement agent. Coordinate the bridge loan timeline with your purchase and your sale so funds are available at the right time.
What is a contingent offer?
A contingent offer says you will buy the Preston Village home only if your current home sells within an agreed window. If your home does not sell in time under the contract terms, you can terminate without breaching the contract.
- Contract terms: Includes a contingency period, how “acceptable sale” is defined, and what happens if timing slips.
- Kick‑out clause: Many sellers add a clause that lets them accept another offer unless you remove your contingency within 24 to 72 hours.
- Earnest money: You still post a deposit. Depending on the contract, it may be refundable if the contingency is not met.
- Costs: Fewer direct loan fees, though you still carry your current home’s costs until it sells.
- Timeline: Often 30 to 60 days, adjusted to match local days on market and seller comfort.
Pros and cons for buyers
Bridge loan
Pros
- Lets you write a stronger, non‑contingent offer in a competitive neighborhood like Preston Village.
- Reduces timing stress so you do not have to rush a discount sale of your current home.
- Can create a clearer path to align closings.
Cons
- Higher borrowing cost with added fees.
- You may carry two mortgage payments if your sale takes longer than expected.
- Requires solid equity, credit, and reserves to qualify.
Contingent offer
Pros
- Lower direct cost since you avoid short‑term financing fees.
- Helps you avoid carrying two mortgages at once.
- A safer option if your cash reserves are limited.
Cons
- Weaker in multiple‑offer situations. Sellers may pass on your bid.
- You can lose the home if a non‑contingent offer appears and you cannot remove your contingency.
- Sellers may push for a higher price or tighter terms to offset their risk.
What Preston Village sellers consider
- Certainty and speed: Contingencies create timing risk and a higher chance of fall‑through.
- Kick‑out protection: Many sellers keep marketing the home and set a short response window if another offer comes in.
- Proof of progress: Sellers often want evidence that your current home is listed and actively marketed.
- Earnest money: A larger deposit or earlier release to escrow can help reduce seller concerns, if appropriate under the contract.
How local conditions shape your choice
Preston Village is a micro‑market within Cary. Inventory, price bands, and days on market shift during the year. In a faster market, sellers tend to prefer non‑contingent offers, which makes bridge financing more attractive for competitive homes. In a balanced or slower period, a well‑structured contingent offer with a short window and strong earnest money can still win.
Before you choose a path, check a current snapshot: recent days on market, months of inventory, and list‑to‑sale price trends in Preston Village at your price point. Match your strategy to the data and your comfort with cost and risk.
Costs and risks at a glance
- Bridge loan costs: Interest that is higher than standard mortgages, plus origination, appraisal, and closing fees. Ask about any prepayment penalties.
- Carrying risk: If your current home takes longer to sell, you may pay two mortgages for a period.
- Contingent risk: You may lose the home to a non‑contingent buyer, or have to pay more to offset your contingency.
- HOA and taxes: Preston Village homes may be subject to HOA covenants and dues. Wake County property taxes are prorated at closing. Confirm details with your attorney and settlement agent.
How the timeline works in North Carolina
Bridge loan route
- Pre‑qualification: Get a written estimate of loan size, rate, fees, and repayment terms.
- Offer and contract: Submit a non‑contingent offer with proof of funds.
- Bridge closing and purchase closing: Coordinate the bridge loan closing with your purchase closing through your attorney or settlement agent.
- List current home: If not already listed, launch full marketing right after you are under contract on the new home.
- Repayment: Pay off the bridge loan when your current home sells or refinance into permanent financing.
Contingent offer route
- Sign a purchase contract with a 30 to 60 day contingency window tailored to Preston Village conditions.
- List and market your current home immediately with clear pricing and showing access.
- Manage kick‑out risk: If the seller gets another offer, be ready to remove your contingency or step aside.
- Align closings: Work with your attorney to match closing dates and manage HOA dues and tax prorations.
Negotiation plays that work here
If you use a contingent offer
- Shorten the contingency window to match local days on market, and share your marketing plan.
- Increase earnest money or offer flexible closing to help the seller feel secure.
- Agree to a reasonable kick‑out response time and show proof that your home is active on the market.
If you use a bridge loan
- Get pre‑qualified and include a proof‑of‑funds letter with your offer.
- Compare lenders by total cost, not just rate. Review fees and repayment triggers.
- Consider an interest‑only payment plan or a bridge that converts to a long‑term mortgage.
If you are a seller evaluating a contingent offer
- Add a kick‑out clause with a 48 to 72 hour response window.
- Require evidence that the buyer’s home is listed and marketed.
- Consider stronger earnest money terms or milestones where funds become non‑refundable, if appropriate.
Alternatives and hybrids
- HELOC or home equity loan: Often lower cost than a bridge loan, but underwriting and closing can take time.
- Delayed financing: Buy with cash or interim funds, then refinance later under agency guidelines.
- Contingency with rent‑back: You accept a contingent offer and negotiate a short post‑closing rent‑back for extra time.
- Sale‑leaseback: Sell first, then rent back while you shop in Preston Village.
- Combine strategies: Use a smaller bridge plus a short contingency to reduce cost and risk.
Quick checklists
Bridge loan checklist
- Confirm available equity and target loan size.
- Get written quotes for rate, fees, appraisal, and closing costs.
- Clarify repayment scenarios and any prepayment penalties.
- Coordinate dates with your attorney and settlement agent.
- Verify HOA dues, tax prorations, and any special assessments.
Contingent offer checklist
- Finalize your listing agreement and marketing plan for your current home.
- Choose a realistic contingency period based on local days on market.
- Prepare a backup plan for temporary housing or storage.
- Consider concessions like higher earnest money or flexible closing.
Which option fits your situation?
Choose a bridge loan if you need a stronger, non‑contingent offer and you qualify with enough equity, credit, and reserves to manage short‑term costs. Choose a contingent offer if the market is more balanced, you prefer a lower cost path, or you cannot qualify for bridge financing. In both cases, align your timeline, paperwork, and negotiation strategy with Preston Village’s current micro‑market.
If you would like a tailored plan and a live read on Preston Village inventory, connect with Azita K Wilson for a neighborhood‑level strategy, current market stats, and introductions to local lenders and closing attorneys.
FAQs
Will Preston Village sellers accept a contingent offer?
- Yes, especially in balanced conditions or when the offer includes a higher price, a short contingency window, and proof of active marketing on your current home.
How long should a home sale contingency be in Cary, NC?
- A 30 to 60 day window is common, but the right length depends on current days on market at your price point and the seller’s comfort level.
Are bridge loans risky for buyers?
- They can be, since costs are higher and you may carry two mortgages if your home sells slowly; strong candidates have solid equity and cash reserves.
Can I get my long‑term mortgage if I have a bridge loan?
- Many buyers refinance or convert to a permanent mortgage after their sale; work with your lender to pre‑qualify and align timing.
What is a kick‑out clause and how does it work?
- It lets the seller keep marketing the home and, if another offer arrives, gives you a short window to remove your contingency or allow the seller to proceed with the new buyer.
How are closings handled in North Carolina?
- Real estate closings typically involve an attorney or settlement agent who coordinates title, HOA matters, and tax prorations so your dates and funds align correctly.
