6 Creative Tactics to Compete with Cash House Offers

6 Creative Tactics to Compete with Cash House Offers

As part of the home buying process, most of us need to get pre-approved for a mortgage, and later, secure financing. But there are buyers who can purchase a home outright with cash. Common sense realizes that many sellers prefer a cash offer to one where financing is needed, if you know what to do. Here are some strategies that you can use to your advantage:6-creative-tactics-resized

  1. Show them the money: When competing with cash offers, money can talk. If you can afford it, then bid over the asking price. Even as little as 2 or 3 % can make the difference. While no one truly wants to bid over the asking price, it can be the way to secure the property you love.
  2. Submit a larger than expected earnest money deposit: As part of your home offer, you will need to provide a sum of money – called earnest money – that accompanies your offer that be used towards your deposit. If you try to back out of the contract, you can lose your earnest money. But by providing a larger than average deposit, you can show just how serious you are about closing this home purchase. Although what you are really doing is offering the seller more money towards the deposit a little sooner than usual, it speaks volumes about your sincerity in the transaction and financial stability.
  3. Removing any contingencies: Many home offers have contingencies – you must sell your existing home first, you require a home inspection, you want certain appliances, or you would like a certain closing date. However, to strengthen your position and convince a seller to accept your offer, you may consider removing some or all of your contingencies. Just remember that you will be assuming any risk that was the subject of the contingency.
  4. Value added: As expected, the goal of the seller is to maximize their net return on the transaction. As a buyer, that means you need to sweeten the deal any way you can. Be creative! For example, you could cover your home warranty policy, suggest that you pay for some or all of the seller’s closing costs, or provide any other add-on that can sway the seller towards you when competing with cash offers.
  5. The personal touch: On the outside, buying a house can be thought of as a purely financial transaction. But for those involved in it, emotions most definitely have a part to play in the decision making process. When you’re the buyer, try to meet the sellers or write them a letter about why you are the right buyer for the property. If you make the right impression, the sellers may be more inclined to sell their beloved property to someone who will take care of it and enjoy it just as they did.
  6. The gift of time: Moving is a stressful time, especially when you are both selling and buying at the same time with little to no overlap in closing dates. To make this easier on a seller, you can offer them an extra day or two to move out after the official closing date without requiring compensation – as long as it works for your situation too.

While cash may be king, there still are strategies that you can use when competing with cash offers. Consider the tactics above as some possible constructive ways to help you purchase the house of your dreams.

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