Can you get a private loan while your property is listed for sale?

You’ve listed a property, the business needs cash this month, and the sale won’t settle for another six to ten weeks. A private lender can usually bridge that gap, secured over the property you’re selling, with the sale proceeds repaying the loan. What decides the answer isn’t the sale sign out the front. It’s how confident the lender can be that the sale will land, and when.

How does a private lender treat a property that’s listed for sale?

As an exit plan with a security attached. In our three-questions framework, the property answers “what’s the security?”, your business need answers “what’s it for?”, and the sale answers “how is it repaid?”. Most of the work in a listed-property loan goes into that third question.

A lender will typically ask for:

• the agent’s appraisal or market comparison, and the listing agreement;
• the title details and the payout figure on any existing mortgage;
• a clear business purpose (stock, a supplier deposit, working capital, a contract mobilisation);
• a signed contract and settlement date, if you have one;
• your own plan B if the sale is slow.

None of this is unusual. It’s the same evidence a bank would want, just assessed faster and with more weight on the property than on your paperwork. If that sounds like your situation, see if you qualify and we’ll tell you where you stand.

Listing, contract, settlement: three stages, three levels of comfort

The stage your sale has reached changes how the lender sees the risk.

Stage	What the lender sees	What it usually means for the loan
Not yet listed, or just listed	An expectation	Smaller amount against value, longer term allowed
Under contract, cooling-off running	A buyer who can still walk	More comfortable, but not locked in
Unconditional contract, settlement date set	Documented repayment date	Strongest exit evidence, most flexibility on amount

For most Queensland residential contracts, the buyer has a 5 business day cooling-off period that doesn’t apply to auction sales. A lender watching your file will notice when it ends. A contract that has passed cooling-off, and any finance or building-and-pest conditions, is firmer than one that hasn’t.

How long does a sale really take, and why does it matter?

Because the loan term has to outlast the sale, not match it. A sale has four clocks running: days on market, the cooling-off and conditions period, the settlement period written into the contract, and any delay on the buyer’s finance. Add them honestly.

Market conditions also move the first clock. Recent market updates citing Cotality data have Brisbane’s median days on market well above where they were a year ago, so the agent’s first estimate may be optimistic. If your whole plan depends on a quick sale, ask the agent for the real recent time-on-market for your suburb and price bracket, not the best result they’ve had.

Lenders know this, so a sensible term for a listed property is built around the likely settlement date plus slack. If the term you’re offered matches the best-case timeline exactly, the extension terms deserve a hard look. Our letter of offer checklist covers what to confirm.

A worked example: Chermside, $150,000 needed in three weeks

An owner runs a commercial cleaning business and has listed their $1.1 million Chermside house. It carries a $400,000 mortgage. The agent expects a sale in 6 to 8 weeks with a 60-day settlement. The business needs a $150,000 equipment deposit within three weeks to lock in a new contract.

What the lender would work through:

1. Value and equity. The listing appraisal is $1.1 million, a valuation confirms it, and $150,000 on top of a $400,000 mortgage is well within the equity.
2. Net proceeds. At $1.1 million, less the $400,000 payout, agent commission and legal costs, the owner expects a comfortable surplus, far above $150,000.
3. Term. The listing-to-settlement estimate is roughly four months. The lender sets a longer term, say six months, so a slow sale doesn’t turn into a default.
4. Structure. A second mortgage over the property, or a caveat arrangement where it suits (see caveat loans), with the first mortgagee’s consent where needed.
5. Plan B. If the sale slips, the owner can relist, refinance to a bank on the equity, or extend by agreement.

This is an illustration only, not a quote. Your numbers will differ, but the sequence is the same.

What comes out of the sale before you see any cash?

More than most owners expect, and this is where many sale-as-exit plans get tight. At settlement the proceeds are typically applied in this order:

• the discharge of the existing mortgage, with accrued interest and fees;
• the payout of the private loan, including any costs written into your offer;
• the agent’s commission and marketing costs;
• conveyancing and any adjustments for rates and utilities;
• whatever remains is yours.

Settlement itself runs through your solicitor or conveyancer, generally on PEXA, where the discharge of your existing mortgage and the payout of the new loan are coordinated on the day. The payout figure is calculated to a specific date, so if settlement moves, a new figure is needed. Have your conveyancer brief the lender on the date as soon as it’s confirmed.

What can go wrong, and how do you plan for it?

A listed property loan fails in predictable ways. Most are avoidable if you plan for them.

• Sale falls over. Finance on the buyer’s side declines, or building-and-pest finds something. Ask what extension looks like, in dollars, in the letter of offer.
• Sale price comes in lower. Check the loan still clears comfortably at a price 10% under the agent’s appraisal.
• Settlement is long. A 90-day settlement is perfectly legal and you may be paying interest throughout.
• Existing mortgagee consent is slow. If you’re adding a second mortgage, the first lender may need to consent. Start early.
• The business need is actually bigger. If the funds are going to prop up the business, ask whether the loan solves the problem or only delays it.

A short urgent settlement deadline isn’t a reason to skip the paperwork. It’s the reason to get it in order first.

Is a bridging loan the same thing?

Close. A private bridging loan is short-term funding that is repaid when a specific event occurs, most often a sale or a refinance. A loan against a listed property is a bridge with a sale as the repayment event. The important difference for you: here the funds are for business purposes. Loans for buying your next home are a different product.

If you’d rather have a longer horizon than the sale, our guide to exit strategies private lenders accept covers the alternatives, including refinancing back to a bank.

What should you ask before you sign?

Five questions are worth putting in writing:

1. What is the term, and what happens on the day after it ends?
2. If the sale is late, what does an extension cost in dollars?
3. Is there a minimum interest period, and does it apply if the sale settles early?
4. Does the lender need the first mortgagee’s consent, and who is arranging it?
5. What are all the third-party costs (valuation, legal, registry) in dollars, and which are payable if the loan doesn’t proceed?

Our guide on private lending red flags lists what to watch for.

Borrowing against a sale that hasn’t settled yet

Being between a listing and a settlement is a nervous place for a business owner. The money is as good as there, but it isn’t in the account, and a supplier, a landlord or a contract deadline doesn’t care. This is the kind of situation a private desk exists for.

Enquiring takes about 60 seconds, and there’s no credit check when you first ask, so your credit file isn’t touched just by finding out what’s possible. We don’t send your details out to a pile of lenders. A real person reads your file, looks at the property, the sale and the purpose, and phones you to talk through it. Please fill in the form as accurately as you can, particularly the property address, the mortgage balance and the sale timeline, so we can match the right option the first time.

Whether your property is on the market or about to be, see if you qualify →