Today we talking all about buying a home when you’re competing against a cash buyer. I know that for many buyers believe that they are going to automatically be out of the running for a home if they are up against a cash buyer but that just isn’t true. Why? Sellers need to look at what their net proceeds will be at the end of the sale. So while a cash offer may sound appealing it may not allow the seller to net the amount of proceeds that they need at the end of the sale, which can make a non-cash offer more appealing. I worked with a seller who had multiple offers on their property and for them it wasn’t about the net proceeds or about the terms it was about the offer that had the least amount demands in it.
So, you’ve finally found it. The home of your dreams. You’re ready to make an offer. You’re excited and then BAM! You get the notification that there has been another offer- and it’s all cash. What are the odds? Who the heck has that kind of money laying around? I know you may be reaching for the tissue as you see your dreams crumble into dust around you… but…. HOLD ON FRIEND. I am here to tell you that you are down, but you are NOT OUT. Let me explain. As I mentioned above it isn’t always all about CASH:
Here are the 4 biggest steps you need to take in order to be competitive against a cash buyer. Trust me on this, you’re still in the game.
#1 Make a stronger offer
Making a stronger offer is all about getting noticed. Money talks, so you’re going to have to find another way to get your foot in the door. There are several ways you can do this. First, you can offer more money than the asking price. The only thing that speaks louder than cash is more cash. Second, you can write an offer that demands less. Showing the seller that you are much easier to work with will go a long way.
#2 Write a love letter to the seller
It sounds cheesy, I know. But sometimes it works. Let them know earnestly why you love this home, need this home, HAVE TO HAVE THIS HOME. A sweet story of serendipity may win the hearts of the sellers. After all, the sellers were once the buyers too. They may hear you out.
#3 Never give up
There’s no doubt that cash buyers have a lot of power. And one of the ways that they wield this power is by skipping the banks, sidestepping a ton of escrow procedures, and making lots of demands. They know that they can usually back out of the deal easily if their demands aren’t met. And if these demands go unmet, the cash deal may fall through. So never give up. You may lose the home to a cash buyer initially, but don’t be surprised if you get a call from the sellers a few weeks later asking if you’re still interested in buying their home! It’s never a bad idea to ask to have your offer put in the back-up position just in case.
When you’re up against tough competition in the buying sector, it’s so imperative to have a good real estate agent on your side who can get your offers noticed. I know how to navigate all of these situations with ease. I make sure to talk to the sellers agent prior to writing the contract to find out if there are things that their sellers are looking for in an offer. A couple of things that sellers may be looking for are rent back, or are looking for a quick close. If that’s the case knowing that up front before writing the offer means that those items can be put in your offer which can help with negotiations later on.