Cash is king in real estate, and home sellers often prefer to receive cash offers over mortgage-backed deals. However, not all buyers can afford to put hundreds of thousands of dollars in cash upfront when buying a house.
A cash offer can be a good deal for both parties, but it’s not always an easy thing to beat. Fortunately, there are several strategies that can help you get the home of your dreams without putting in too much money.
The first step in beating a cash offer is to make sure you have solid financials, which means you must have steady employment, no debt, good FICO scores, and the ability to come in with a 20 percent down payment. This is especially important for first-time homebuyers, who need to be able to demonstrate they can meet a lender’s requirements.
Next, make your offer as attractive to the seller as possible. This can mean reducing or waiving your home sale contingency, or increasing the amount of your earnest money deposit.
Covering an appraisal gap can also be a big advantage in your fight against cash offers. In addition to making your offer more appealing, you’re giving the seller peace of mind that there won’t be any surprises when the home appraisal comes in. Also read https://www.sellmyhousefasthoustontx.com/we-buy-land-cash-tx/
Another way to beat cash buyers is by putting in an escalation clause that automatically increases your offer up to a certain percentage, depending on how much other bidders are willing to offer. This can be a great way to increase your chances of winning the deal by up to four times, according to a recent study.
Be memorable
One of the best ways to stand out against a cash buyer is by being memorable and likable. Your offer should include a personal story about the property, and why you want it. This can be a colorful, unique way to express your love for the home and the neighborhood.
Use a well-known lender
When you have strong financials, you can be more competitive in a real estate market. If you’re a first-time homebuyer, it’s crucial that you use a well-known lender that can provide the kind of loan you need to buy your dream home.
The lender you choose should also have a track record of working with buyers. This will help you feel comfortable with their approach to the home buying process, and will also make it easier for you to get financing.
Leave a note on the front porch
Sometimes, a personal touch can go a long way. A recent client of Jennifer
Branchini, a real estate agent with Better Homes and Gardens Real Estate in Pleasanton, California, used this tactic when they were competing against a cash offer. The buyer left a note on the porch with a bottle of wine and a toy for the owner’s dog.
This was an effective strategy that worked to their advantage, and it’s something that many homebuyers can replicate.