Monday, October 14, 2019 / by Shawna Calvert
Jumping first at cash offers can seem tempting for sellers since it offers the possibility of a faster closing. But despite this perk, cash buyers don't always win! Many times, they make low offers or demand costly extras, both of which will mean lost cash for the seller. If you are trying to buy a home, don't let these competing cash offers scare you off.
Do you want to boost your chances of getting the home you want when competing with cash buyers? Here are some things to consider:
1. Include a preapproval letter. Get you financial document together including 2 previous years W2's, 3 months worth of statements from your down payment bank or investment accounts, a list of your debts and your current pay stubs. Then find a mortgage lender an get pre-approved. Presenting a note from your lender stating that your a well-qualified buyer can go a long way.
2. Waive your financing contingency. A financing contingency is the agreement you make with the seller that you will only purchase the property if your loan comes through. Sometimes loans just don't work out on the first try. In a traditional agreement, you would just say "bummer" and walk away, leaving the seller high and dry. With a waiver, you are telling the seller that you are SUPER confident your loan will come through, so confident, that you are choosing to waive the financing contingency. This puts you in a much better position with a seller than a buyer who presents an offer with a contingency on financing. Note- if the mortgage is denied, you will lose your earnest money with this strategy.
3. Work with a fast-moving lender. The amount of time it takes your chosen lender to close on a home loan can vary greatly from lender to lender. Choosing one known for fast transactions shows sellers that you're willing to move at their pace. Get in touch if you'd like a referral to a trusted lender.
HINT: Another great way to make your offer more appealing to a seller is to discover their desired closing date and give it to them!
4. Offer more earnest money or a bigger down payment. More money down means you're serious about purchasing their home, which gives sellers the most confidence in your offer.
5. Make an appropriate offer. When the local market is seeing bidding wars frequently, you want to be sure that you submit the highest price you are willing to pay for the home right off the bat. We'll discuss local comps to assess the home's value allowing you to make an attractive offer right from the very beginning. Low offer are likely to be dismissed without a second glance.
6. Write a personal letter. A personal letter can help you to pull on the heartstrings of your seler and make your offer more attractive. You can highlight things you and the seller may have in common such as gardening. Mention your goals for the home like raising a family, being close to neighborhood schools, etc. There are many approaches that you can take with this letter, let us help you draft a winning personal letter.
7. Communication is key. Choose your buyers agent carefully. Most often the final decision comes down to superior and timely communication between buyers agents and sellers agents. Work with an agent that is willing to go the extra mile to find out what is important to the seller.
Are you planning to purchase a new home soon? Get in touch today to discuss the right strategy for your home search. We will be with you every step of the way!