Many people simply don't have the cash up front to buy their new home. And while cash may be preferred by sellers, that doesn't necessarily mean it's impossible to compete with cash buyers if you don't have the money up front. If cash simply isn't an option for you, consider the following tips, all of which can help to ensure that you end up moving into the home of your dreams.
Build your offer out as being a sure thing
If you want to compete with a cash buyer, the most important thing you can do is create an offer that is a veritable shoo-in. Start by asking your lender specifically to write you a pre-approval letter, which will help show you are well-qualified as a buyer. Providing financial information about yourself may seem like an odd way to make an offer on a home, but it can actually increase your chances of winning a bid on the home of your choice. If you have a preliminary copy of the title report, send it to your lender if at all possible.
Keep contingency time down
Sometimes getting an appraiser to a property can take a relatively long period of time. It's not uncommon for the start-to-finish process to take at least two weeks, which can dramatically increase the amount of time it takes for a loan to be turned around. If you can cut down on this contingency time, however, you'll have a much better chance of competing with a cash buyer. Talk to your lender about whether or not there may be a way to expedite the process.
Order a rush inspection
As with appraisals, inspections can sometimes take a great deal of time to nail down. If you're willing to pay a rush fee to your inspector, he or she will most likely be willing to get in and out of the home as fast as possible and create a rush report. It's extra money out of your pocket, but sometimes that's what it takes to win a bid over a cash buyer.
Pay more than you might otherwise
No one wants to pay more than is necessary for a home of any kind, but sometimes getting past an all-cash buyer requires you to think outside the box a little. Whenever someone makes an all-cash offer, they will almost always be expecting at least some form of a discount from the seller, which usually results in them making a lower-than-normal offer. If there's one thing that can help you beat a cash offer, it's topping it. It may seem as if you're wasting money, but that all depends upon how badly you want to move into the home you have your eyes on. If it's that important to you, throwing down the extra cash may be well worth your while.
Get to know the seller
In any type of transaction, you can benefit from knowing the person you're buying from. This not only helps to get people on the same page but assists in developing a sense of trust which can truly go a long way. You don't need to actually spend your free time with the individual, but writing a personalized cover letter introducing yourself and expressing your interest in the home can sometimes make a world of difference. It can be a shot in the dark, but you've got nothing to lose.
Cash offers will always be difficult to beat, but if you take a methodical approach, you should have no issues doing so.
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