4 Tips on How to Compete with Cash Buyers
Cash sales are currently a huge fraction of all sales in the market, over 50 percent of sales in some areas, even though they have been decreasing. Cash buyers are people who don’t need banks or other financing, which is not common since most people do not have money like that on hand.
Lots of international buyers are in this equation, people trying to get their money out of unsecure countries, as an example. Or just smart international investors seizing an opportunity that has a good ROI.
Here is some advice I have been giving to my customers when we are competing with cash buyers:
- Do Not Choose the Discounted Price
A fast sale is important to some sellers, but most care more about the numbers. Cash buyers expect a deep discount off the listing price for paying up front. To compete with the cash investment, offer a price as close as possible to the asking price, assuming the asking price is consistent with market values.
A pre-approval is a credit decision that informs the seller that you have a solid loan offer and the bank has already done the work to check your credit, background, income verification etc. This is almost as good as up-front payment because it is factual documentation of what you bring to the table.
- Take a Risk?
Remove the financing contingency. A financing contingency, also known as a mortgage contingency, states that the buyer must get approved for a loan before being able to complete the purchase of a home.
This contingency is a form of protection for the buyer; in the event that the buyer cannot secure financing, they can back out of the home purchase and reclaim their earnest money. ( https://www.redfin.com/home-buying-guide/financing-contingency ).
This is not suitable for everyone, as it is a risk. If you don’t close the deal, you could lose your escrow deposit and face other issues. Talk to your attorney and lender before you make this decision. A good idea is to choose a well-known lender. The agent’s recognition of the lender name may give you a leg up in the competition.
- Compete Clean
Make your offer straightforward. If you want to be chosen by the seller, offer as much money as you can afford by paying closing costs, have a short inspection period, and no extra hidden costs.
Other ways to make it simple is to have no hidden fine print. Remember, time is money, so don’t waste the seller’s time, and you will be strong in the competition against cash buyers!
Your Real Estate Agent is always your best partner under these circumstances, which require a lot of experience and market intelligence, which are key to a successful buying experience. This is one of the many reasons why you should always use a Real Estate Agent to buy or sell a property.
I am here to help you “Invest in Your Lifestyle”. Please contact me if you are thinking about buying or selling a home in South East Florida.
“At Florida 360 Realty, our mission is to empower the buyer with a financial acquisition strategy, provide the seller with a profitable exit strategy and develop a significant capital growth strategy for the investor.”
FLORIDA 360 REALTY, LLC
2853 Executive Park Drive – Suite 202
Weston, FL 33331
Phone: (954) 449-2529