Compass Offers Loan to ‘Bridge’ Transaction Gaps for Sellers
October 22, 2019
Real estate firm Compass has announced a new loan option enabling sellers to move into a home before selling their current one. The loan option through Compass Bridge Loan Services covers not only sellers during such a common gap in the real estate but also qualifying home sellers who work with a Compass agent, who will be able to apply for no out-of-pocket costs for up to six months on any approved bridge loan.
“Until now, it’s been far too difficult for homeowners to easily access the equity in their homes,” says Carly Litzenberger, senior director of new ventures at Compass. “By unlocking this capital, Compass is putting the power back in the hands of the homeowner and bringing a new group of buyers to the housing market.”
Real estate brokerages and a growing crop of iBuying firms have been addressing this often contentious point in a real estate transaction, where a home seller needs to sell and buy a new home at the same time. But when homeowners require the funds from their existing home to buy their next one, transactions can be filled with contingencies and worries. iBuying companies like Opendoor have been teaming with homebuilders and real estate brokerages to offer sellers a cash offer on their home to trade in and move on.
Under Compass’ program, sellers can gain access to financing to cover the gap between a home sale and a new home purchase. Compass clients can apply for up to six months of loan payments. Compass, which teamed with Better.com and Freedom Mortgage for the program, is using its own funds to support the bridge loans. The program allows qualified home sellers to make a down payment without having to sell their existing home. They can then make plans for their next home before selling their current home.
The program is available in select markets.
Sellers can also use the program in combination with Compass Concierge, a program that helps homeowners make presale home improvement updates such as professional staging, painting, and more. The cost of those services are recouped at closing. Concierge programs are another growing trend among brokerages.
Updated: July 10, 2020