In today's real estate market, which is often tricky to navigate, our goal remains to get our clients into the home of their dreams - or even their first home as a family. With the lack of inventory and competition to cash buyers, The Lending Group specializes in helping people realize their perfect home and stay in the competitive game even when they’re using a loan option instead of cash. One of the most common questions from potential buyers is how they can beat an offer that is cash-only and has no contingencies (i.e., if things don't go as planned, such as financing). The fact remains that when negotiating with sellers, this type of contract poses some risk for them. The reason being, it doesn’t offer any guarantees or assurances on whether anything goes wrong down the line before closing. So, today we’ll share the four ways we at The Lending Group work with our clients so they can compete against these offers and ultimately get more favorable terms when purchasing a property.
Know Your Budget
The ultimate first step is getting pre-approved. Make sure you get prequalified, make sure your documents are up to date and submit an offer with your local lender. As a side note to that, it's really best practice that you use a local lender at all times for this process because they're ready and able to get your loan process into underwriting as fast as possible. Mortgage loans can be intimidating, especially to first-time homebuyers. Pre-qualification can instill your confidence in that you know what your magic numbers are and can shop without worry.
Share Another Side of Yourself
Number two is submitting an "offer letter", which people often call "love letters". Whatever you want to call it, the idea is to basically tell the seller why they would want to select them over someone else’s cash offer. Explain in detail why you or your family should be chosen as a potential buyer. Is there some sentimental value to part of the house? Is the location the perfect spot for your kids? There are often times where homeowners actually take into account the passion, drive, and even personality of the buyer when selecting from a handful of bids.
Go the Extra Mile
Third is the importance of simply submitting an excellent offer. If you like the house, especially if it's going to be primary residence, and you've gone over the budget and can afford to buy it - then put in your very best offer for that property. It's ok with a primary residence to go over budget by a little bit, as today's market is so different than before. And when you have been pre-approved or approved by a lender, there is no reason not to stretch a bit.
Communicate Openly About Closing
Number four is equally important- actively manage your closing times. Talk to your lender and make sure ahead of time that they can keep a deadline and shorten that closing time for you. This way, your offer versus a cash offer has as much more incentive. You may end up going over a few thousand what the cash offer is, plus now the seller’s waiting time is short. This will make your offer worth their while, which makes a win-win scenario for both parties – the seller and the buyer.
I hope this information was enlightening and helpful with your home buying quest. If you’re ready to jump in and land the home you’ve been visualizing, give me a call. Don’t navigate this market alone – I’m here to help realize your dream with you!