Hard Money Guide for Utah Realtors in 2025
Introduction
In 2024, nearly a third of all homes nationwide were purchased with all cash. In Utah, cash buyers closed on approximately 20% of Utah’s homes. That remaining 80% of Utah home buyers closed with some sort of financing.
But that 80% of closed sales that relied on financing were very hard won, I mean, ask any Utah realtor, and they will agree! Banks and other lenders really tightened up lending in 2024, using every excuse not to lend, and to even the most qualified of buyers.
The result? Frustrating delays, endless conditions, and a long, drawn out closing process for both buyers and sellers. In 2024, transactions with financing contingencies killed a lot of deals and made many Utah realtors nearly lose their minds! But there’s a game-changing solution most realtors simply don’t know about, and it’s hard money loans.
Unlike traditional loans, hard money loans have less funding conditions and a much shorter closing timeline of 7 to 10 days instead of 45 to 60 days. For Utah realtors, hard money loans could be a way to rescue stalled out transactions or to outbid cash buyers.
But also, hard money loans allow realtors to be able to remove the financing contingency that kills almost every deal: the sale of a buyer’s current home.
In this 2025 Utah Realtor’s Guide to Hard Money Loans, you’ll learn:
- How to use hard money loans to win a bidding war
- Facts to educate buyers/sellers on these loans
- How to remove financing contingencies to make stronger offers
- 3 local case studies with proven results
- A step-by-step playbook to partner with lenders
Why Utah Realtors Can’t Afford Not to Know About Hard Money Loans
1. The Cash Buyer Problem
- A large percentage of Utah listings receive cash offers.
- Traditional loans take 45-60 days to close; cash buyers seal deals in an average of 14 days.
- The Solution: Hard money loans allow your buyers to act like cash buyers. How?
- Hard Money Loans remove both appraisal and financing contingencies from the offers made on homes.
- Example: A Salt Lake City, Utah realtor closed a $850,000 home in 16 days using a hard money loan. The due diligence period was 14 days, and it closed 2 days later. The realtor’s offer beat 4 other offers with various contingencies. How’s that for closing fast with no hassle?
2. Making Competitive Offers that Get Accepted
- Problem: No Room for Negotiation: Why do realtors struggle submitting offers that are ‘below asking’ for their clients with contingencies such as financing?
- No incentive for sellers to take a lower price
- There’s a high probability offers will be rejected
- Solution: Hard money lenders can close in under a week, which gives sellers an incentive to accept a lower price than asking price.
- Case Study: Tom and Janice had been looking for a home in Utah for awhile, when one suddenly came up in their price range. They had been preapproved with a local hard money lender for a bridge loan to purchase a home. When this home popped onto the market, Tom and Janice’s realtor made a “cash-like” offer with no contingencies. The realtor submitted the offer with a proof of funds letter from the local hard money lender. The seller accepted the offer and they closed on the property in 14 days.
- Hard Money Loans for Properties that Need Rehab
- Utah has a lot of old, outdated housing stock: Many homebuyers don’t want to purchase a home that needs repairs or updating because of the cost involved. There are FHA loans available for purchase and renovation of outdated homes, also called 203(k) loans. A lot of realtors know about this FHA loan program, but the problem with the 203(k) loan is that it can take as long as 2 months to close! Many sellers won’t give a buyer that much time to close. Not to mention, all of the restrictions, and special conditions of the 203(k) loan program. But there are some local, Utah hard money lenders who offer rehab loans which have way less requirements as compared to the 203(k) loan, and they can close quickly, usually in 2 weeks or less.
- Utah Markets with Outdated Home Inventory:
- Ogden, UT: Because the Ogden, Utah market has a lot of homes built prior to the 1980’s, there are a lot of opportunities to buy a home that needs fixing up.
- Provo, UT: There is a lot of outdated housing stock in Provo, Utah. Many homes were built before 1970, a lot of older homes were converted into student housing, or have been purchased by young families as first time homebuyers.
- Midvale, UT: This fast growing submarket of Salt Lake City is full of 1930-1950 bungalows and 1970’s split levels, all of which desperately needed updating.
- Solution: Some Utah hard money lenders will cover up to 80% of the total project cost (purchase + rehab) to help Utah home buyers to purchase and rehab outdated Utah homes. These loans close faster (in a quarter of the time in most cases) as compared to the well-known 203(k) loans. For example, a hard money rehab loan can close in under 2 weeks, whereas the 203(k) loan can take 8 weeks. Once the renovation is completed, buyers can refinance with a long-term, 30-year mortgage.
3 Steps to Find a Utah Hard Money Lender to Work With Your Clients
Step 1: Use Local Lenders Who Understand Utah’s Market
Ask around to other realtors and mortgage brokers to see if they know any Utah-based hard money lenders. Or do a google search for “hard money lender Utah” and find a company that is based in Utah that offers hard money loans. And remember, not all hard money lenders are created equal. Ask these questions:
| Question | Why It Matters |
| “Are you local to Utah” | Local expertise typically means that no appraisal will be required. |
| “What’s your fastest closing timeframe?” | Utah-based hard money lenders can close a lot faster than out-of-state lenders. But each lender is different, so always ask this question! |
| “What is the average interest rate you charge and total fees as a percentage of the loan amount?” | Get a ballpark of the hard money loan terms offered by each lender so you aren’t shocked when a lender quotes the interest rate or fees to your clients. |
Red Flags to Avoid:
- Out-of-state lenders who say they can close in under 10 days, but who also require appraisals for loan approval.
- Utah hard money lenders who quote extremely high interest rates and fees, but then also demand really large size down payments.
- Vague answers about fees or timelines for closing.
- No reviews from Utah borrowers.
Pro Tip: Ask other realtors and mortgage people who they use for hard money in Utah. Attend local real estate investor meetings such as the Salt Lake Real Estate Investors Association (SLREIA) monthly meeting to network with real estate professionals who are already working with hard money lenders in Utah.
Step 2: Educate Your Clients About How Hard Money Loans Work
Most buyers/sellers don’t understand how hard money loans work. Use these short scripts to guide them:
For Buyers:
“If traditional financing is not available, or if it falls through, we know lenders who can fund loans in under 7 days. Let’s discuss a backup option.”
For Sellers:
“Some buyers utilize hard money loans. These loans can close quickly, similar to all cash.”
For Hesitant Investors:
“Hard money loans let you leverage the property’s after-repair value (ARV) and can fund some of the renovations. That way you can update the property and sell for a higher price for a profit. For example, if a home’s ARV is $500,000, you could borrow up to $350,000 to fund purchase and renovations. And then, resell the home for a profit!”
Step 3: How to Submit Offers Using a Hard Money Loan on a Purchase
Use a Tool called a “Proof of Funds Letter” with your offer
Speed is your competitive edge when submitting offers to sellers. Use a proof of funds letter to submit with your offers to show sellers that your buyer already has private financing in place. This allows your buyer to close as soon as the due diligence period ends, so no contingency for appraisal or financing are required.
How to Write an Offer on a Purchase Using Hard Money
- Indicate in the offer you are using a hard money loan
- Remove Contingencies: Private money loans operate similar to all cash, this means there are no contingencies other than buyer due diligence. Most hard money lenders do not require appraisals, so there’s no appraisal deadline to write into a contract. And since the private money loan is essentially pre-approved, there is no financing contingency to write into on offer either! By removing those 2 contingencies from the offer, you have a better chance of getting an offer accepted.
- Share compelling statement with Sellers: When submitting your offer, tell the seller’s agent or the seller the following:
“We work with lenders who can close in 14 days or less.”
Debunking 2 Common Hard Money Myths
Myth 1: “Hard Money Loans Are Too Expensive”
- Reality: Most hard money loans are interest only loans. That means if you only keep the loan for 4 months, you only pay interest for the time you need the loan. For example, if the interest rate is 12%, and you keep the loan for 4 months, you pay 4%, not 12%.
Myth 2: “Only Bad Credit Borrowers Use Hard Money Loans”
- Reality: People most often use hard money loans because they have a need for speed in closing on a transaction, or for another short-term need such as a partner buy out, a divorce settlement, etc. It’s not because someone has bad credit that they seek out hard money loans!
- Example: A husband and wife owned a commercial building jointly. As part of their divorce settlement, the husband agreed to buy out the wife from the property by giving her a specific cash out amount. He was also obligated to refinance the mortgage on the property that was in both of their names. The husband got a hard money loan to pay off the mortgage and cash out the wife, in exchange for the wife transferring full ownership of the property to the husband. Once the husband bought out his wife, he went to his local bank and applied for a long-term, commercial loan, such as a 20-year mortgage. Within 3 months, he paid off the hard money loan with a 20-year commercial mortgage.
Utah Case Studies: Realtors Who Closed More Transactions Using Hard Money
Case Study 1: From 0 to 6 Deals in 12 Months (Provo, Utah Realtor)
- Challenge: A Provo, Utah realtor was losing listings to cash buyers due to the highly competitive market.
- Solution: The realtor met a hard money lender who explained to her how she could close in 14 days or less, “I can close as soon as your client’s due diligence deadline ends.” This lender did not require an appraisal but instead used a Broker’s Price Opinion of Value.
- Results:
- This realtor won 3 bidding wars on 3 properties and got 3 other properties under contract by submitting “cash-like” offers using hard money.
Case Study 2: Rescuing a St. George Buyer With Hard Money
- Challenge: A bank denied a St. George, Utah buyer at the last minute for a minor reason. The seller stood to lose 4 weeks in the process of closing with this buyer that suddenly lost his financing.
- Solution: The hard money lender approved the buyer within 48 hours and closed in under a week, saving the transaction.
Case Study 3: Salt Lake City Relocation Loan
- Challenge: A growing family had outgrown their current home and needed to buy a larger home in the Salt Lake City, Utah market. But all of their down payment was locked up in their current home. So they first needed to sell the current home, before they could qualify to buy a larger home.
- Solution: The realtor knew a Utah hard money lender that could see the family had a lot of equity locked up in their current home.
- Result:
- The hard money lender approved the family for a type of hard money loan called a “bridge loan for relocation.” The hard money lender did a loan on the new home purchase, and a loan on the current home behind the first mortgage.
- The family purchased the new home and moved into it, vacating their current home which made it sell faster. Once their old home sold, the family paid off the balance of the hard money loan that was leftover with a 30-year mortgage at a lower interest rate.
Your 2024 Action Plan
- Reach out to 2-3 Local, Utah Hard Money Lenders: Vet them using the questions above. Add their contact information to your phone. Reach out to them frequently with potential transactions to see they are a fit for hard money.
- Educate your Buyers and Sellers:
- Educate your buyers and sellers on how hard money loans can facilitate various transactions to close faster, and with less hassle, as compared to traditional financing.
CTA:
Ready to close more transactions this year? Contact us or call someone on our team to get to know us as one of your preferred, Utah hard money lenders. Reach out to us at, 435-565-1768.
