Make a competitive offer against an all-cash buyer

Updated: May 7


How to Make a Competitive Offer Against All-Cash Home Buyers

As the spring market continues to heat up, many active markets like Boston are seeing an increase in cash buyers. Although this is not an unusual scenario, it can strike fear in new buyers bidding on a home. So what if you can’t make a cash offer? We recommend the following steps for buyers who need to maintain a competitive edge against cash buyers. If you can’t make a cash offer, you can still compete!

How many of the following can you answer “yes” to?

The more the better.

  • Do you have a 20-percent down payment?

  • Are you well employed?

  • Do you have cash reserves in addition to your down payment?

  • Do you have very little debt?

  • Do you have good credit?

If you answered yes to most or all of these questions, your purchase should be as strong as a cash home buyer’s.

Okay, you’ve gotten this far, How else can you compete?

Be transparent about your finances.

In addition to a pre-approval letter from your lender, be open to allowing your agent or lender to provide financial information with your offer (salary, credit, etc.)

Get a head start on the mortgage.

See if your mortgage professional can move the process along sooner. Send the lender a copy of the preliminary title report, if available. If you’re buying a condo, find out if a condo questionnaire is available and give it to your lender. If you take any of these steps, let the seller know.

Shorten the loan and appraisal contingencies.

Ask your lender how quickly they can send an appraiser to the property, and how long the loan would take to turn around. In some parts of the country, loans are being approved in less than 14 days — sometimes even 10.

Inspect quickly if you choose to do an inspection.

Shelling out a few hundred dollars and getting the inspections done within days of having your offer accepted shows the seller you mean business.

Overpay.

Cash buyers nearly always expect a discount from the seller simply because they’re offering cash and are a sure thing. To increase your chances, top the cash offer, even if means paying a little more than you think the home is worth. If you plan to live in the house for many years and it’s the home of your dreams, paying a little more to get the deal might only translate into $20 per month over the course of a long-term mortgage.

Make yourself known to the seller.

The seller almost always wants to know more about the potential buyer. Ask your agent to write a cover letter and an introduction. Let the seller know who you are, why you like the home and what your intentions are.

Use a trusted, expert real estate agent. Contact us today to get started.

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