Competing with cash buyers isn’t impossible, just difficult. Sure, some sellers will take the major moolah every single time and there’s nothing you can do about it. But if you go in with a strategy, you might just have a shot. Here’s how to create one.
Figure out the seller’s goals
Determining what’s most important to your seller can be key to getting your dream home—even when you’re competing against an all-cash buyer. “People often think that all sellers want the most aggressive, quick close, for the highest price. That’s not always the case,” says Shashank Shekhar, founder and CEO of Arcus Lending in San Jose, CA. When he sold his home earlier this year, the most important factor was getting back two months’ free rent, because he was also trying to buy. “Even if the price was slightly lower but came with that offer, we would have taken that over all-cash,” Shekhar says. “Understanding what the seller needs is always the most important thing.”
Consider your contingencies
If you’re willing to forgo a home inspection or secondary appraisal, you may have a leg up over buyers who won’t. “If you’re going to compete with a cash buyer, the contingencies may be a concern for a seller,” says Joe Petrowsky, a mortgage broker in Manchester, CT. “If the prospective buyer is willing to eliminate the contingencies, that may be an incentive for a seller, especially if there are some issues with the property." This isn’t necessarily the best strategy. Without a home inspection, for instance, the property could have crippling issues that might have precluded you from purchasing, had you known. But if you’re dead-set on this exact house and you’re pitted head to head against a cash buyer, it might be an option to consider. Of course, there’s one contingency you can’t remove: the mortgage. (Hey, if you could, you wouldn’t be reading this right now!)
For the rest of this great article, please hop on over to REALTOR.COM with this handy link.