4 Tips to Compete With Cash Buyers
If you find yourself in competition with a cash buyer for your ideal property, brace yourself for disappointment. Cash buyers are tough to beat, but it can happen with the right finesse. Remember, having a pocket full of cash does not always make for a savvy home buyer. Your brain may just out-muscle their brawn.
1. Aggressively pursue financing
If the house is just the right size, in just the right community, and has the perfect back yard to boot, feel free to fight for it. Get pre-approved (which carries more weight than a pre-qualification) by your lender and attach the pre-approval letter to your offer.
2. Get serious about an appraisal
Pre-order your appraisal with your lender or mortgage broker. This process is simpler if you’re working with smaller lenders instead of a large bank. Having the appraisal ready to go when you place your offer sends a signal to the seller: I’m ready.
3. Arrange for a home inspection ASAP
Once your offer is on the table, send in the home inspector. If the inspection can happen in a matter of a few days, and depending on the overall timeline of the cash buyer, you may outpace the cash buyer. Having your ducks in a row and consistently executing things like home inspection without missing a beat relays your competence and interest, while fostering trust.
4. Pay more
Everyone’s looking for a deal on a home sale, and cash buyers are no exception - in fact, they can be notorious low-ballers. Why shouldn’t they catch some sort of break since they can pay for everything upfront? Because the seller would rather receive a greater profit on the home sale. If it’s in your budget or simply worth it to you, try upping your offer to a full 5% or more above that of the cash buyer.