Sometimes in real estate, speed wins.

An increasing number of potential home buyers who need fast cash to close a deal or end a bidding war are turning to margin loans for short-term financing.

Ameriprise Financial Inc., for example, has issued margin loans to clients pursuing a home with multiple offers, an increasingly common occurrence in high-priced California residential markets where demand outstrips supply. "A person with easy access to cash may have a leg up over someone who has to have long-term financing," said Tucker Watkins, a private wealth adviser with the wealth-management company based in Irvine, Calif.

Margin loans are backed by a borrower's investments. Typically, brokerage firms permit loan amounts of up to 50% of the portfolio's value at the time the loan is originated. The money can be used for almost anything, including bridge financing—when a buyer needs money to close on a new home when the current home hasn't been sold yet.

Spurred by a bull market in early 2013, investors embraced margin loans with a passion, driving margin debt to $384.3 billion in New York Stock Exchange member firms in April, according exchange data. The previous record of $381.4 billion in margin debt was set in July 2007, just before the market downturn.