When the real estate market begins to favor sellers, the likelihood of receiving several bids for a property increases. In a hot market, the probability of a bidding battle rises dramatically.
Bidders who do not have a mortgage contingency are very rare. Many of these purchasers propose to pay cash for the property. In any competitive housing market, cash buyers are seen with suspicion by people looking to buy houses. Cash buyers may feel as though they can’t compete with credit bidders, which might be disheartening when a great home is on the line.
Here are 5 tips to help you compete against cash buyers:
Obtain a mortgage pre-approval
Get a mortgage pre-approval to demonstrate that you’re a serious buyer. This document from a lender specifies how much money you can borrow and your interest rate.
When a seller receives a cash offer, they no longer have to worry about banks or loans, and the entire procedure runs more smoothly and quickly. That does not, however, imply that competing with a cash offer is impossible. So how do you get the house of your dreams when there are cash offers available? The secret to success is to make the purchase as smooth as possible for the seller.
Write a personal letter to the seller
Another way to stand out is by writing a personal letter to the seller, telling them about your situation and why you want to buy their home. This type of communication can be very compelling for sellers who are looking for the best possible buyer, not just the highest bidder.
Have a large down payment
A large down payment sends a signal to the seller that you’re a serious buyer who is capable of closing the deal. This type of buyers is always attractive to sellers.
Get a loan from a private lender
If you’re having trouble getting approved for a mortgage, you can try getting a loan from a private lender. This type of financing is often more expensive, but it can be a good option if you’re having trouble getting approved for a traditional mortgage.
If you have the cash available, you can always pay for the property outright. This is the surest way to beat out other buyers, but it’s also the most expensive.
When you’re competing against cash buyers, remember these 5 tips and know that you’re not necessarily at a disadvantage. Ask your agent if there is anything you can do to make yourself and your offer more attractive to the buyer, ultimately, winning the bidding war. American Realty‘s family of agents understand the housing market roller coaster and will assist you from showing to closing and beyond. With a little preparation and effort, you can be the one who walks away with the keys to your new home.