How to Win Against Cash Offers
It’s one of the most discouraging things a homebuyer can hear: “There are multiple offers, including cash.”
Cash buyers may be able to close quickly and avoid some of the uncertainty that comes with financing, but financed buyers can still write very competitive offers - there's no reason to give up before even starting.
I recently represented buyers competing against five other offers, including cash investors. My clients were using VA financing and wanted to protect themselves while putting forward a strong offer.
Our offer was accepted (cue the happy dance!!).
Here are a few strategies we used:
1. Get Your Financing Completely Dialed In
A preapproval letter is only the beginning. Your lender should have reviewed your financial documentation, be prepared to move quickly, and be available to communicate with the listing agent.
A responsive lender can help give the seller confidence that financing is solid and the buyer is prepared to close. An agent should be able to recommend a few lenders for you to speak with.
2. Find Out What Matters to the Seller
Price is one part of an offer. Closing date, contingency timelines, possession, and certainty of closing can also influence a seller’s decision.
Before writing an offer, I try to learn as much as I can about the seller’s priorities. Sometimes adjusting the structure of an offer can make it more attractive without costing the buyer significantly more money.
3. Be Strategic With Contingencies
Inspection, loan, and appraisal contingencies can provide important protections for buyers.
In a competitive situation, buyers may choose to shorten certain timelines or modify terms based on their finances, the property, and the competition.
These decisions should be made carefully. I explain the potential risks and benefits so my clients can make informed choices about the protections they are comfortable modifying.
4. Submit a Clean, Well-Prepared Offer
When a seller is reviewing several offers, details matter.
The contract should be complete, the terms should be clear, and the buyer’s financial qualifications should be presented appropriately.
I also communicate directly with the listing agent and work closely with the lender to make sure the seller understands the strength of my buyer and their ability to close.
5. Every Buyer Needs a Different Strategy
A buyer with significant cash reserves may be comfortable taking on more appraisal risk. A contractor buying a fixer may approach inspections differently than a first-time buyer purchasing an older home.
I help my clients understand where they have room to strengthen their offer and where additional risk may have serious financial consequences.
My clients won their home because we understood the competition, prepared carefully, and gave the sellers confidence in our ability to close.
If you’re thinking about buying in Pasadena, Altadena, Highland Park, Eagle Rock, Glendale, Burbank, or anywhere in NELA and the surrounding areas, I’m happy to help you develop an offer strategy that fits your goals, finances, and comfort level.
Home is just the beginning.