Did you come across a home buyer who only wants to pay cash for homes? But you can gain edge over them. Use this offer to draw them in.
Facing a cash buyer when you’re looking to buy a first home or a new home can be daunting. In 2015, 25% of homes were sold for cash. Buyers come along with their pre-qualification and suddenly, investors snatch their dream home out from under them by paying cash for homes.
If you’re looking to buy a home, don’t let cash buyers deter you. This handy guide will show you how to be competitive in your quest to buy a new home, even if you can’t pay cash.
Why Buyers Offer Cash for Homes
Buyers who can offer to pay cash do so to benefit the seller and themselves. Sellers are often on tight timelines and have worked hard to prep their house for sale. If a buyer comes in and can buy the house outright, that’s attractive because the sale can sometimes move more quickly.
Buyers benefit because they can usually offer a lower price for the home if they’re willing to pay for the whole thing in one fell swoop.
The bottom line is that the seller saves time and the buyer saves money. It’s a win-win — so how can you hope to compete with that? Keep reading to find out.
Be Competitive Even With A Mortgage
One of the best ways you can stand on equal footing with a cash buyer is to make yourself financially attractive:
- Have a well-paying job that shows a history of consistent income
- Have extra cash–beyond your downpayment
- Keep a low debt-to-income ratio
- Maintain healthy credit and a healthy credit score
- Be transparent where your finances are concerned
- Get pre-approved for your mortgage, not just pre-qualified
Competitiveness isn’t just about showing up with the right financial profile; there are actions you can take to supplement your stellar finances–or even perhaps mitigate average finances.
You can offer to pay more than the typical 20% downpayment. This shows the sellers that even though you can’t afford cash for homes, you’re willing to meet them part-way.
You can offer a higher price for the home. Remember that cash buyers are in it to save. Sellers might be willing to work with you for more money.
Alternatively, you can offer to pay some of the seller costs; don’t be afraid to negotiate.
Selling your home before buying another means you’re ready to move fast, even if you have to take some extra financial steps. You can also ask your lender to start your mortgage early or get an inspection or appraisal taken care of right away.
Finally, don’t be afraid to get personal. Sellers are people too, and people can have a strong reaction to a personal connection.
Don’t be afraid to write about the connection you feel to the seller’s house in your offer letter.
The concluding idea is that you have every right to bid on a house you love just as much as a cash buyer. Don’t lose sight of that fact, and remember too that if 25% of homes are sold for cash, then 75% of homes are not sold for cash.
Do you have questions about paying cash for homes? Contact us and we’d be happy to discuss your questions.