Market conditions remain a bit testy and challenging for home shoppers who struggle against competitive cash buyers.
Here’s the issue with cash buyer competition:
1. – They can close faster.
2. – They bring a greater sense of security to sellers.
3. – Cash offers are typically “preferred” by sellers because it’s all about the bottom line.
Do not fear! This doesn’t mean that you shouldn’t bother pushing back against cash competitors. You still stand a solid chance if:
1. – You can put 20% down.
2. – You are well employed.
3. – You have savings PLUS your down payment.
4. – You have a low debt load.
5. – Your credit is good.
Cash isn’t always a guarantee that buyers will succeed in their home purchase. Well-qualified buyers can still win out on a home purchase if they can put a little more money down.
The Aitken Home Team presents seven tips for handling cash buyer competition like a pro:
1. – Know your financial status. Provide the seller with a pre-approval letter from your lender as well as additional helpful financial info. Be sure the seller understands your salary, what you have in the bank, and a copy of your credit report. You want to provide your professional real estate agentwith more than enough info to show the seller’s agent that you are serious and that you are every bit as viable and tempting an offer as that of a cash buyer.
2. – Get a jump on your mortgage. Ask your lender to move things along quickly and provide your lender a copy of the preliminary title report. In the event of a condo purchase, try to obtain the condo questionnaire on behalf of the lender.
3. – Shorten the loan & appraisal. Try to get your appraisal done quickly and ask your lender how long the loan would take to turn around. Shoot for a 10-14 day approval period.
4. – Pre-order your appraisal. Try to get an appraisal ordered in advance and notify the seller at the time of your offer that it has already been ordered. The goal is to complete the appraisal within 24-48 hours of an acceptance of your purchase offer in order for your financial institution to fund the loan quickly.
5. – Pre-order your inspection. You may also schedule an inspection within a short time of getting your offer inspected. Most purchase contracts state that the purchase of a home is contingent upon a satisfactory inspection. Sellers appreciate having this step taken care of quickly in order to move forward in the real estate transaction process.
6. – Increase your offer. Cash buyers are in the habit of negotiating special discounts and perks because they are paying with cash. If possible, offer more than your cash competitors, focusing on the percentage which you are offering (such as 5%) beyond that of your competition. This could mean as little as an additional $15/month on your mortgage.
7. – Write a letter. Some buyers elect to compose letters to the seller in hopes of presenting a more appealing party. While this method doe not always work, it certainly does not hurt. Include what you love about the home in the body of your letter as well as some interesting family details.
In the end, it is up to the seller whether or not your offer will be accepted. The best thing to do is make sure your finances are in order, retain an experienced, professional realtor and have a strategic game plan for moving forward.
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For more information, contact The Aitken home Team today!