Whether you’re buying or selling a house, it can be challenging to compete against cash buyers in today’s real estate market. This is because fewer properties are on the market and there’s a huge pool of would-be homebuyers eager to buy. This creates bidding wars and soaring home prices. Despite all this, many home shoppers still choose to use a mortgage when financing their new property.
Getting Preapproved+ for a Loan
Before you make your offer, get preapproved for a loan+ to show that you’re a capable buyer who can qualify for the home you want. This will save you time during the purchase process and give sellers confidence that you’re able to secure the home you desire.
Sending a Proof of Funds Letter
A quick email or letter that shows you have the necessary cash to close the deal can go a long way toward convincing sellers that you are a credible homebuyer who will close on time and with minimal hassle. It’s also a great way to demonstrate that you’re willing to take risks and aren’t just playing it safe with a low-ball offer. For more info https://www.1stkeyhomebuyers.com/
Increasing Your Earnest Money Deposit
Another way to stand out from the competition is to increase your earnest money deposit. This is a type of good faith deposit that you’re required to put down to reserve your right to buy the home. Typically, the more money you put down, the higher your offer will be.
Offering More than the Asking Price
One of the biggest appeals of cash offers is that they’re easier for sellers to accept. Unlike loans, they don’t require appraisals or inspections, so they can be approved much more quickly. This is especially important in a hot seller’s market when the demand for homes is at its highest.
In addition, you can increase your offer to include a flexible closing date. This can help you win over a buyer who may be unable to find a new home as soon as they would like, or who could be more comfortable renting the house back from you while they search for a new one.
Adding an Escalator to Your Offer
If you’re using a traditional mortgage, the escalation clause in your contract is a great tool for competing with cash buyers. However, you have to be careful how much you’re willing to increase your offer.
Using an escalation clause is a great way to ensure that your mortgage-backed offer is the highest and best one that you can submit. Be sure to use it properly so that you can beat out the most competitive cash buyer and land your dream home.
Paying a Signing Bonus
If your mortgage-backed offer isn’t as competitive as the cash buyer’s, be sure to offer a signing bonus on top of the initial amount you’re offering. This can be a big draw for sellers who don’t want to lose out on a home they love because you’re too expensive.