A cash offer is very attractive to the seller for a couple of reasons. First, it means there is no issue of waiting on a loan approval. Will the buyer get approved or not? Also, cash expedites closing in most cases. It can be hard to compete against another buyer that is able to pay in cash. Hard, but not impossible.
Here are five essential tips to give you the best shot of winning your dream house even if you must go head-to-head with a cash offer.
#1: Get Fully Approved
Most borrowers stop at getting pre-approved for a mortgage loan. That’s not good enough in a competitive market. Sometimes waiting a few days or even a few hours can change a seller’s mind, particularly if there is a stack of cash as the alternative. The best way to expedite closing is to get approval contingent upon appraisal of the home value.
Having a full approval for your mortgage in your back pocket removes one of the biggest advantages that cash buyers can offer – fast money.
#2: Work Closely with the Lender
As an extension of the first tip above, it always pays to stay in close touch with your lender or your broker. Frequent conversations on next steps, extra steps, and new strategies is key. If you feel like your loan officer or broker is getting tired of your calls, then you probably have the wrong agent. There are a lot of moving parts to the mortgage process and the most effective buyers spend the time to learn them proactively rather than waiting on their lender to bring it up.
#3: Send a Personalized Letter
A lot of homeowners get cold feet about selling a home. It’s because there is an emotional connection to the house. Human beings are emotional creatures. Use that trait to your advantage. Write a personalized letter to the seller, telling them what you love about the property, how you and your family are so excited to make it into a home, and even talk about the family traditions you plan on introducing.
For instance, where are you going to put the Christmas tree? Or mention how you are going to keep that old tire swing on the tree in the backyard, because your kids will love it. Making that emotional connection can sooth the seller and give them confidence that the home is going into good hands.
#4: Submit a Complete Contract
Part of the calculus of selling a home is in the seller’s agent. Make sure that any contract that you submit with your offer is complete and error free. The writing should be clear, neat, and legible. All of the information should be complete and accurate. The simpler your offer is and the fewer extra requests you make, the easier it is for the seller to sign and be done with it.
#5: Increase Offer Amount
Money talks. If you talk to your lender and determine that you can afford it, raise your offer just past the listing price. It’s the most surefire way to deal with a cash offer, particularly if you’ve got the tips above already in your pocket. That extra money on the offer is the incentive to the seller and the seller’s agent that any extra delay or hassle as a result of your financing will be well rewarded. However, keep in mind that the house may not appraise for the amount you offer if it is above the asking price.
Pacific Union Financial
Pacific Union Financial, LLC is a full-service mortgage lender providing mortgages, refinancing, and loan servicing across the country and around the corner. With expertise in home loans for credit levels from best to bruised, we’d love to help you enjoy all the benefits of homeownership. Get in touch today and let us show you how we work hard to make mortgage easy.