HomeLight vs Bridge Loan vs HELOC: LA Buy-Before-Sell Options | The Borges Team
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HomeLight vs. Bridge Loan vs. HELOC: Comparing Your Buy-Before-Sell Options in Los Angeles

You have five main options for buying before selling in Los Angeles: HomeLight Buy Before You Sell, Knock, traditional bridge loans, HELOCs, and contingent offers. Each has different costs, timelines, and risk profiles. Here's an honest comparison to help you decide which fits your situation.

Quick Comparison: Cost on a $1.2M LA Home

Option Approx. Cost (6 months) Backup If Home Doesn't Sell?
HomeLight BBYS $28,800 (2.4% flat) Yes - Guaranteed purchase
Knock ~$28,850 Yes - Guaranteed purchase
Bridge Loan $45,000-55,000 No
HELOC $15,000-20,000 No
Contingent Offer $0 N/A (rarely wins)

Option 1: HomeLight Buy Before You Sell

HomeLight BBYS Best for Most

How it works: HomeLight unlocks up to 70% of your equity before you sell, provides a Guaranteed Backup Offer, and gives you 120 days to sell on the open market.

Cost: 2.4% of sale price ($28,800 on $1.2M)

Timeline: 24-hour pre-approval, 120 days to sell

Requires: Partner agent, 10%+ equity, marketable home

Pros: No interest charges, guaranteed exit, fast approval, vacant staging advantage

Cons: Requires partner agent, backup offer is below market value, 21-day listing requirement

Option 2: Knock

Knock Bridge Loan™ Alternative

How it works: Similar to HomeLight. Knock provides up to 100% of expected equity, with a 180-day timeline to sell.

Cost: 2.4% under $400K, higher above

Timeline: Longer approval process, 180 days to sell

Requires: Partner agent, good credit, marketable home

Pros: Longer sale window (180 days), potentially higher equity unlock (up to 100%)

Cons: Longer approval timeline, fees can be higher on more expensive homes

Option 3: Traditional Bridge Loan

Bridge Loan Higher Risk

How it works: A short-term loan secured by your current home's equity. You borrow against your equity and repay when your home sells.

Cost: 9-11% interest + 1-2% origination ($45K-55K over 6 months)

Timeline: 2-4 weeks to close, no guaranteed sale timeline

Requires: Strong credit, ability to qualify for both mortgages

Pros: No partner agent required, work with any lender, flexible terms

Cons: Interest charges, no backup offer if home doesn't sell, must qualify for both mortgages, highest total cost

The Bridge Loan Risk

If your home doesn't sell, you're responsible for both the bridge loan payments AND your new mortgage. There's no backup offer, no guaranteed exit. In a slowing market, this risk can become serious quickly.

Option 4: HELOC

Home Equity Line of Credit Lowest Cost, Highest Effort

How it works: Open a line of credit against your current home's equity before listing. Use it for your down payment, then pay it off when you sell.

Cost: ~8% variable rate ($15K-20K over 6 months)

Timeline: 2-6 weeks to set up, must be done BEFORE listing

Requires: Strong credit, significant equity, ability to qualify

Pros: Lowest cost option, keep using your existing lender, flexible draw amount

Cons: Takes weeks to set up, must qualify while still owning current home, no backup offer, variable rate risk

Option 5: Contingent Offer

Contingent Offer Free But Rarely Wins

How it works: Make an offer contingent on selling your current home. If you don't sell, you're not obligated to buy.

Cost: $0

Timeline: Varies by negotiation

Requires: A willing seller (rare in competitive markets)

Pros: No cost, no risk

Cons: Sellers strongly prefer non-contingent offers; in competitive LA markets, contingent offers rarely win

Decision Framework: Which Is Right for You?

Choose HomeLight BBYS if:

  • You want certainty (guaranteed backup offer)
  • You're competing in a hot market
  • You want to avoid interest charges
  • You're okay working with a partner agent

Choose a HELOC if:

  • You have time to set it up before listing
  • You want the lowest cost option
  • You're confident your home will sell quickly
  • You can qualify while owning both homes

Choose a bridge loan if:

  • You can't find a partner agent
  • You need more flexibility than BBYS allows
  • You're comfortable with the risk of no backup offer

Try a contingent offer if:

  • The market is slow and you have leverage
  • The property has been listed for a long time
  • You're willing to lose the house if it doesn't work out

Is It Worth It? The ROI Analysis

BBYS Cost vs. Benefits on $1.2M Home
BBYS Fee (2.4%) $28,800
Non-contingent advantage (2%) -$20,000
Vacant staging premium (5%) -$60,000
Avoided temp housing/double-move -$18,000
Net Benefit +$69,200

Even with conservative estimates, the math often favors BBYS-but not always. The calculation changes based on your specific market, timeline, and home condition.

Ready to Compare Your Real Options?

I'll run the numbers for your specific situation and tell you honestly which approach makes the most sense.

Call or Text (213) 444-2225

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FAQ

What's the cheapest way to buy before selling?
A contingent offer costs nothing but rarely wins. Among funded options, HELOCs are typically cheapest (~8% variable rate), followed by BBYS programs (2.4% flat), then bridge loans (9-11% + fees).
What's the difference between HomeLight and Knock?
Both offer similar programs. HomeLight unlocks up to 70% equity with 120-day timeline; Knock offers up to 100% with 180-day timeline. Knock's fee structure varies by home price. Both require partner agents.
Can I use a HELOC to buy before selling?
Yes, if you have enough equity and can qualify while carrying both mortgage payments. HELOCs have the lowest cost but take 2-6 weeks to set up and offer no backup guarantee.
What happens if my home doesn't sell with a bridge loan?
You're responsible for the bridge loan payments until it sells-regardless of how long that takes. There's no backup offer or guaranteed exit like BBYS programs provide.
Do I need a special agent for HomeLight?
Yes. HomeLight requires a certified partner agent. You cannot access the program directly or through non-partner agents.
JB

Justin Borges

HomeLight Partner Agent | DRE# 01940318

Disclaimer: This article provides general information comparing buy-before-sell options. Costs, rates, and program terms are subject to change. Consult with lenders, financial advisors, and qualified agents for guidance specific to your situation. The Borges Real Estate Team is a HomeLight partner and may receive compensation for HomeLight referrals.