How to compete with “all cash” offers? This is a question that is on many potential homebuyers’ minds, especially as the housing market becomes increasingly competitive. Here are our best tips for staying ahead of the pack:
How to Compete with All Cash Offers
First things first, we need to dispel the notion that all cash offers entail potential homebuyers arriving at closing with suitcases stuffed with hundred dollar bills. An all cash offer is simply one in which the buyer doesn’t need to obtain outside financing to purchase a property.
Here are three easy ways to beat all cash offers:
Showcase your Strong Finances
Even if you need to secure outside financing to purchase a home, it doesn’t mean that your finances are a mess – so let the seller know!
Ask yourself these questions:
- Do I have enough cash for a 20% down payment?
- Do I have a steady income?
- Will I have money in the bank after I make my down payment?
- Do I have good credit?
- Do I have little to no debt?
A yes to even 4 out of 5 of these questions still qualifies you as a competitive buyer, so make sure the seller knows! You should also talk to your lender about drafting a pre-approval letter and ensure that your agent provides evidence of your financial ability with your offer.
Offer to Condense the Timeline
Speak to your lender about how quickly an appraisal can be scheduled and how long the waiting period would be for a loan approval. Sometimes, you can avoid an appraisal if you are able to put enough of your own money down. Other times you can move the process along by asking your lender to not hold back on the appraisal during your inspection period.
A quick timeline is one of the best ways of how to compete with all cash offers, as many sellers are anxious to move forward.
The thing with all cash offers is that those who make them tend to think that not only will the seller offer them a discount on the property, but also that they will be universally accepted for being more “financially sound.” So, to beat them, you may find success if you offer a little bit extra.
If it’s your dream home, the extra investment could just be worth it.
BONUS TIP: Introduce Yourself to the Seller
Not in person, obviously, but ask your Realtor to include a short cover letter about you, your goals, and why you love the home to pass along with your financial history in your purchase offer. This sometimes, but not always, gives your offer the boost it needs.
Need help competing with all cash offers?
We can’t wait to work with you! Contact us today.