Trying to buy your next home in Dexter before selling your current one can feel like solving a puzzle with moving pieces. You want the right house, the right timing, and a smooth transition for your family. In Southeast Michigan, the choice often comes down to two paths: using a bridge loan or making a sale-contingent offer. This guide breaks down how each option works, what it costs, and how to choose the best fit for your move-up in Dexter and Washtenaw County. Let’s dive in.
Dexter market factors to watch
Your strategy works best when it matches the market. In tight markets with low inventory and multiple offers, contingent offers are often less competitive. In balanced conditions, sellers may be more open to contingencies, especially with clear timelines.
Before you choose a path, look at current inventory, median sale prices, and typical days on market for Dexter and nearby areas. What is happening with offers that include home-sale contingencies over the last 90 to 180 days also matters. In Dexter, factors like Dexter Community Schools and commute patterns to Ann Arbor or Detroit suburbs can influence demand and seller expectations.
Bridge loan basics
How a bridge loan works
A bridge loan is short-term financing that lets you use your current home’s equity to fund the purchase of your next home before you sell. Lenders offer different forms, including a standalone bridge loan, a temporary second mortgage, or a HELOC or home equity loan used as interim funding. You still need strong fundamentals like good credit, a solid debt-to-income ratio, and enough equity to meet the lender’s loan-to-value requirements.
Some lenders will require appraisal and title work on both properties. You will also need to show a plan for selling your current home, since the bridge is usually paid off with the sale proceeds.
Costs and timelines
Most bridge loans move from application to funding in about 2 to 4 weeks, though timelines vary by lender and product. Terms commonly run 6 to 12 months. The price is typically higher than a standard mortgage, with interest that is often at a premium, plus origination fees, appraisal and closing costs, and possible prepayment fees.
You must also budget for carrying costs on two properties until your current home sells. That includes mortgage payments, insurance, taxes, and utilities.
Pros and risks
- Pros:
- Your offer can be non-contingent and more competitive.
- You avoid a rushed sale or a contingency chain.
- You can wait for the right replacement home to hit the market.
- Risks:
- Higher borrowing costs and fees than traditional loans.
- Potential to carry two mortgages if your home takes longer to sell.
- Not all lenders offer bridge financing, and underwriting can be complex.
- If your sale falls through, you still owe interest and principal.
Sale-contingent offer basics
What a contingency is
A sale-contingent offer says you will buy the new home after you sell your current one, usually within a set timeframe. If you do not sell, you can walk away without taking on extra debt. The key is drafting precise terms so everyone understands deadlines, what counts as a completed sale, and how other offers will be handled.
Common structures
- Full home sale contingency that protects you until your sale is complete.
- Contingency with a defined period for selling and closing, often 30 to 90 days.
- A kick-out clause that allows the seller to keep marketing the home; if they get another offer, you have a set number of hours, commonly 24 to 72, to remove the contingency or step aside.
- Pairing a contingency with short possession or a rent-back to help a seller with their move.
Pros and risks
- Pros:
- No new short-term debt and lower immediate borrowing costs.
- Lower financial risk if your home does not sell in time.
- Risks:
- Less competitive in stronger seller markets.
- The seller may accept but continue to market, which adds uncertainty.
- Timelines can be tight for families juggling school or work schedules.
Costs to compare
When you compare a bridge loan to a contingent offer, look beyond the headline rate. Build a simple side-by-side analysis that includes:
- Direct borrowing cost:
- Bridge loan interest, origination, appraisal, and closing fees.
- For contingencies, no new short-term loan costs but normal costs for permanent financing when you buy.
- Carrying costs:
- With a bridge, plan for two sets of housing costs until you sell.
- With a contingency, you may avoid overlap, but there could be rent-back costs or brief double payments depending on dates.
- Transaction complexity costs:
- Bridge loans may mean two appraisals and more paperwork.
- Contingencies can lead to renegotiations or a rushed sale if the clock is tight.
- Opportunity cost:
- If a contingency causes you to lose a home you love, you could face extra moving or temporary housing costs.
- If a rushed sale lowers your proceeds, that could outweigh bridge fees in some situations.
Risk and competitiveness
Seller perception matters. In competitive Dexter and Washtenaw submarkets, non-contingent offers often have an edge. That does not mean a contingency cannot work. You can improve a contingent offer with stronger earnest money, clear timelines, and reasonable flexibility on closing and possession.
Timing also shapes risk. If your move is tied to a job start date or the school year, delays can be stressful. Bridge financing can reduce that scheduling risk, but raises financial risk if your current home takes longer to sell. A well-crafted contingency lowers borrowing risk, but can increase the chance you lose your target home if a cleaner offer appears.
Which path fits your situation
Use these common scenarios as a guide while you gather quotes and current local data:
- Scenario A — High equity, steady income, competitive market:
- Lean toward bridge financing or a HELOC as interim funds to make a non-contingent offer more competitive. Ask your lender for a pre-approval that references your bridge or HELOC plan.
- Scenario B — Moderate equity, balanced market, risk-averse:
- Consider a sale-contingent offer with a concise timeline. A negotiated kick-out clause can help the seller feel protected while giving you a path forward.
- Scenario C — Low equity or tight cash:
- A contingency is usually safer. You can also look at timing tools such as rent-back or flexible possession to help a seller who needs breathing room.
- Scenario D — Urgent move with fixed timing:
- Bridge financing or short-term rental while you sell may be the cleanest route if timing is critical.
Step-by-step next moves
Whether you choose a bridge or a contingency, preparation protects your time and budget.
If you plan to use bridge financing:
- Talk with lenders early to verify terms, loan-to-value and debt-to-income requirements, and exact costs.
- Seek a conditional commitment or pre-approval letter noting your bridge or HELOC availability.
- Price your current home realistically, and prep it for market to shorten days on market.
If you plan a contingent offer:
- Draft clear language with deadlines and definitions that match local practice.
- Tighten your contingency window as much as your situation allows.
- Strengthen your offer with solid earnest money and a flexible, seller-friendly closing timeline where possible.
For either path:
- Create a backup plan for logistics, such as temporary housing, school enrollment timing, and storage.
- Coordinate among your listing agent, buyer’s agent, and lender so dates and documents align.
- Consider attorney review for complex clauses, rent-backs, or unique financing.
Quick checklists
Bridge loan checklist
- Compare bridge, HELOC, and portfolio options from multiple lenders.
- Confirm appraisal and title needs for both properties.
- Calculate total cost: fees, estimated interest over the term, and carrying costs for two homes.
- Build an exit plan that includes pricing and a realistic sale timeline.
- Obtain a bridge approval letter to submit with offers.
Contingent offer checklist
- Write precise contingency terms that define sale milestones and deadlines.
- Prepare a marketing plan and timeline to sell within the contingency period.
- Consider a kick-out clause and negotiate a reasonable response window.
- Use stronger earnest money or seller-friendly terms to improve acceptance.
- Align closing dates and moving plans well in advance.
Local notes for Washtenaw and SE Michigan
Dexter’s demand pattern often tracks nearby Washtenaw communities and the broader Ann Arbor area. Commutes to Ann Arbor, Ypsilanti, and Detroit suburbs can shape when listings draw the most attention. School calendar timing can also influence seller preferences and buyer urgency, so align your strategy with your family’s schedule.
The right approach changes as market conditions shift. Verify current inventory, days on market, and the recent frequency of accepted contingencies in Dexter and nearby neighborhoods. Your decision is strongest when it reflects what is happening on the ground right now.
Mini case snapshots
Case 1 — Bridge loan wins the house:
- A Dexter family with strong equity wanted a larger home near key commute routes. The market was competitive, and homes in their target neighborhood were receiving multiple offers. They used a bridge product, wrote a non-contingent offer, and closed on the new home, then sold their previous home within their bridge term. Their higher borrowing cost was offset by the ability to secure the home they wanted.
Case 2 — Contingency provides safety:
- Another household had moderate equity and preferred to avoid carrying two mortgages. In a more balanced submarket, they wrote a well-structured home-sale contingency with a short window and a fair kick-out clause. The seller accepted, they sold within the deadline, and both closings aligned with minimal overlap.
Bottom line
In Dexter and across Washtenaw County, bridge financing can make your offer more competitive, while a well-crafted contingency can reduce borrowing risk. The best choice depends on your equity, cash reserves, timing needs, and the pulse of the local market. If you want help comparing paths and shaping a winning plan, reach out. We will tailor the strategy to your goals and coordinate closely with your lender to keep everything on track.
Ready to talk through your move-up timeline and options? Connect with Demetrius Traylor for a clear plan that fits your family.
FAQs
What is a bridge loan for a Dexter move-up?
- A short-term loan that uses your current home’s equity to fund the next purchase before you sell, usually with higher rates, fees, and a 6 to 12 month term.
Are sale-contingent offers accepted in Dexter now?
- Acceptance depends on market conditions; in tight markets they are less competitive, while in balanced markets sellers may be more open with clear timelines.
How long do home-sale contingencies usually last?
- Common windows range from 30 to 90 days, and many agreements include a 24 to 72 hour kick-out clause to respond if another offer arrives.
Can I use a HELOC instead of a bridge loan?
- Yes, if you have available equity and qualify, a HELOC or home equity loan can serve as interim funds and may cost less than a dedicated bridge product.
How do I make a contingent offer stronger in Washtenaw County?
- Shorten timelines where possible, increase earnest money, consider a reasonable kick-out clause, and offer flexible closing and possession terms.
Will I qualify for a new mortgage if I take a bridge loan?
- Many lenders will finance the new home while you carry a bridge, but underwriting will include the combined debt, so confirm requirements with your lenders.
