To sell a property quickly after a bridging loan, you’ll need to price it competitively to attract demand or look into options like remortgaging, refinancing, or in the worst case – negotiating an extension with your lender.
Bridging loans are great financial tools to secure quick funding for property projects. But their short repayment window means you need a solid exit strategy for paying them back.
If you’ve taken out a bridging loan and need to sell a property quickly to repay it, here are some ways to help.
Repaying Your Bridging Loan
Before we look into how to sell your property, it’s important to understand why it’s so important to have a well thought through exit strategy before securing a bridging loan.
These high-interest, short-term loans are a great way to fund property purchases, renovations or other financial gaps. When applying, lenders will want to see how you plan to repay them – and this plan usually involves selling a property.
Whilst the lender will work closely with you to make sure your plan is viable, the property market can be volatile and a quick sale isn’t always easy. That’s why it’s important to always have a few strategies up your sleeve to help you adapt quickly and secure that sale. Without them, you may be liable for penalties.
Fast Home-Selling Strategies
Selling your home under time pressure doesn’t have to feel chaotic. By focusing on the right strategies, you can speed up the process without selling the property way under market value.
Here’s how
Choose The Right Estate Agent
It may sound obvious, but choosing the right agent can be the difference between a quick sale and a painful process.
Choose someone who:
- Has a good reputation.
- Will be available to do viewings on the weekend.
- Has experience in the local area.
- Is able to market the property well.
Engaging the right person early on in the process means they can hit the ground running once you’re ready to sell.
Price It Right
Price is often the make-or-break factor in a fast property sale. Overpricing can deter buyers, while under-pricing risks undervaluing your asset.
Strike a balance by:
- Looking at local market reports for up-to-date trends.
- Evaluating recent sales of similar properties.
- Speaking to a professional estate agent to get their opinion on the right price.
Focus on Presentation
Humans have small attention spans, so it’s important to think about the elements that will attract attention quickly.
For example, engaging an expensive stager is all well and good, but if the outside of your home looks dated, it’s unlikely to give the first impression you’re after.
Make sure that the driveway, doors and windows all look neat and tidy, so that buyers can see the potential from the first viewing.
Likewise, try not to fill the space too much. Buyers want to imagine themselves living in the space, over staging can deter people with different styles and tastes.
Look Good Online
The majority of homebuyers start their search online. Make your listing stand out by:
- Using professional photos that bring your home to life.
- Including a virtual tour so people can more easily see the space.
- Sharing your listing on platforms like social media, Zoopla and Rightmove for wide reach.
The Ace In Your Sleeve: Auction Houses
If you’re running out of time, cash buyers and auctions may be your best bet.
While cash buyers can complete transactions quickly, auctions guarantee your home will be sold on a certain date – and they often complete within the month.
Whilst selling a property at auction may mean a slightly lower final price, it is still a better strategy than defaulting on the loan and potentially losing the property.
Alternatives to Selling The Property
If you decide you no longer want to sell the property, but have a bridging loan to pay back, there are some other options. These include:
Transition to a Traditional Mortgage
Switching to a long-term mortgage can provide some relief by lowering monthly payments and extending repayment terms. Depending on your property’s use, consider:
- Residential mortgages for primary homes.
- Buy-to-let mortgages for rental properties.
Some lenders require a minimum ownership period before remortgaging, so speak to a specialist to make sure you navigate the process successfully.
See our guide around how to remortgage after a bridging loan
Explore Refinancing
Refinancing your bridging loan with another lender might mean you can lock in better terms or lower interest rates.
Start early to make sure you transition across smoothy and avoid potential delays and penalties.
See our guide around can I refinance a bridging loan?
Negotiate With Your Current Lender
If repayment isn’t feasible within the agreed timeline, contact your lender. They may offer an extension or alternative arrangements. It’s in everyone’s best interest for the loan to be repaid without having to go through a repossession.
Liquidate Other Assets
If you own other properties, stock or valuable assets, consider selling these to generate the funds needed to clear your bridging loan.
It might seem like a big step, but it could help you combat any expensive penalties
Key Steps For Selling A Property Quickly
- Act proactively: Start exploring repayment options well before your loan term ends or list the property as quickly as possible.
- Work with experts: A trusted mortgage broker, estate agent or financial advisor can help you work out the best financial plan.
- Stay transparent: Open communication with your lender can help you find workable solutions in challenging situations. Give them a heads up if it looks like your exit strategy may not go to plan.
Repaying A Bridging Loan
Repaying a bridging loan can be daunting, especially if the deadline is coming up, but having a clear strategy ahead of time can make the process easier.
Whether you choose to sell your property or explore alternative financial options, taking quick action is important. With smart planning and the right professional advice, you can repay your bridging loan without any worries or stress.
If you are looking for bridging loans between £250,000 – £2,000,000 with funds available within 2 weeks, call Blue Square Capital on 020 3912 8360 and get your free, no obligations consultation today.
