Finding the perfect home is a great feeling but losing that home to another buyer can be a shock to the system. At Berkshire Hathaway HomeServices we have represented home buyers who come from every background and have every type of situation. We often find that they assume if another buyer comes to the table with an all cash offer, that their options are limited. This is not always the case. Read on to learn how you can beat an all cash offer and then contact us at (310) 373-0021 if you need representation.
Get written pre-approval from a major lender
Before you even begin the home buying process, and before you start looking seriously at homes for sale, get a formal, written pre-approval from a major lender. This allows you to move very quickly once you have found your home, and it also assures that you know what price point will work for you. If you have this paperwork in hand, and you are a qualified buyer, then you may be seen as just as good as an all cash buyer.
It’s all about timing
The main issue for sellers is that a cash buyer can close very quickly, while a loan will typically take an average of 45 days to close. However, there are loan products that can close much faster. In fact, some can close as quickly as 15 days. Once the property is in contract, underwriting then needs to review the offer. Appraisal and title report come next. Major lenders take longer, but some can get it done as quickly as 25 days. If the main reason that the seller wants to work with a cash buyer is timing, then look for ways to get the loan closed faster.
Show them that you’re serious
In some cases, it may be as simple as showing the seller how serious you are about their home. This means putting down the full 3% deposit up front in some cases. In other instances you could show them that you have accepted an offer on the home you’re selling. It can mean different things, but if you find a way to prove that you are serious then it may make a difference to the seller.
Take care of requirements
Depending on where you are purchasing the home, there may be requirements the seller is required to take care of. For example, the Monterey Peninsula Water Management District requires 1.28-gallon toilets, low-flow faucets, rain sensor, and low-flow showerheads. Instead of making the seller take on these changes, offer to do it yourself.
You never know what is most motivating to a seller If there is a personal reason that you want the home, then it may be worth writing them a letter or talking to them about it. It could mean the difference between getting your dream home and losing it.