Posted on December 27, 2017 - 01:50 PM
by Peg Augustus
As a buyer who needs a mortgage to purchase a home, it will be tough for you to compete against an all-cash offer, particularly in a market where multiple offers abound. From a seller’s perspective, an all-cash offer eliminates both hassle and risk, as do offers without appraisal or financial conditions, which, in a hot real estate market, can also reduce your chances of success. There are, however, some ways to make your offer more competitive. For example:
Try to avoid multiple-offer situations
Ask your agent to help you find off-market properties
Consider waiving the financing contingency clause, which allows you to cancel the contract if you don’t receive loan approval, or if an appraisal comes in below expected value
Increase your down payment
Securing a pre-underwriting letter may make your offer more attractive. Unlike a pre-approval letter, this one has teeth. It contains deep income and asset documentation, which sellers like to see, as it means you are a serious buyer, plus it may move you through the approval process more quickly.
Many cash buyers are overly confident and therefore submit unrealistic, low-ball offers. So, while cash is worth a 2 percent to 3 percent discount, sellers annoyed by the low bid might just accept yours instead.
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