Cash is king and will always be king. In today’s real estate market, there is an abundance of cash buyers, ripe with cash from investment properties or from downsizing later in life.
When a seller receives a cash offer s/he does not have to worry about banks or loans and the entire process tends to run smoother and quicker and, after all, time is money. At the end of the transaction, the seller gets paid the same way. Cash transactions close much more quickly and that is the important point.
The trick is always to make the credit offer look more appealing for the seller. Be able to move quickly.
Having a home sale fall through is extremely frustrating for any seller, and financial difficulties are a common problem. This is one reason why cash buyers are so appealing; the cash is available without having to wonder if the buyer will get financing. To make an offer more tempting, the credit buyer should come to the table with plenty of evidence that their offer is just as solid and as quick.
A pre-approval letter from a lender indicating that the buyer is a well-qualified and approved can help overcome some of the seller’s concerns.
Those who are comfortable being open with the seller should also consider making financial information available to the seller, such as employment information or assets, to help bolster the claim that a loan for the particular person is a sure thing.
Cash buyers know that their offers look appealing to sellers because of their ability to pay cash up front. For this reason, at times they expect some kind of discount on the listing price. The credit buyer can help counteract the appeal of the cash offer by offering a higher bid.
Certain steps, such as waiting for appraisals and loan approval, can end up adding weeks or months to the process. Speak with the loan officer to try to learn what can be done to speed up the timeline.
Sending a personalized letter may or may not have any impact whatsoever if the seller makes analytical decisions. Believe it or not however, there are some who will make decisions based on emotion. If the offers are very close or even slightly better, the buyer who has connected personally with the seller could have the upper hand.
To make an offer seem even more appealing, some buyers will take risks such as waiving the appraisal contingency or the home inspection.
One of the terms in a real estate offer that is almost always very important to a seller is the closing date. When you are competing against a cash offer being super flexible with the seller’s desired closing is really important. If the seller want to close on a specific date make sure you give it to them!
There is no denying that competing against a cash offer will be difficult. The convenience that the offer presents for the seller makes it very appealing, especially given the difficulties that can arise when dealing with a buyer procuring financing.
A cash offer on a house that a credit buyer has fallen in love with does not mean that there is nothing that can be done. Taking the above advice will give any credit buyer the best chance of securing their dream home, regardless of the other bids.