Hard money loan
A short-term loan from private lenders, secured by the property. Used mostly by investors for flips and fast closings. Rates are high, terms are short, but funding is quick.
Your Room opens on showings and offers, with everything before the listing already ticked.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.
See how it worksWhere this comes up: on the market
Part 1 of 4
Why a seller cares
An investor offering a fast close often has hard money behind it. It funds in days, costs the borrower a lot, and it is real money, so the offer can be as reliable as cash if the lender is.
Part 2 of 4
A simple example
A flipper offers $210,000 for your fixer with a ten-day close, funded by a hard money lender at 11% and three points.
| What you see | What is going on |
|---|---|
| A ten-day closing | The lender does not underwrite the borrower's income, so it moves fast |
| No appraisal contingency | The lender does its own valuation of the after-repair value |
| A request for proof of funds | Ask for the lender's commitment letter; that is the proof |
Hard money is fast and expensive for the buyer, and close to cash for you.
Part 3 of 4
What people get wrong
That hard money is a sign of a shaky buyer. It is a sign of an investor who is paying for speed.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines hard money loan in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.