A cash buyer can perform and close quickly, as well as provide sellers with a sense of comfort. However, that doesn’t mean that a serious buyer putting down 20 percent or more shouldn’t attempt to compete with the cash buyer—especially if they are gainfully employed; have cash reserves in addition to a down payment; have very little debt, and have good credit. Here are 7 tips that might make a big difference when it comes to getting a mortgage and prevailing against an all-cash buyer.
1. Be upfront about your finances
Give the seller all of the confidence they need to accept your offer by making it as strong and solid as a cash offer. That means getting a pre-approval letter from your PERL Mortgage Loan Officer and be sure to let them know they can contact your PERL Mortgage Loan Officer to understand the extensive level of documentation that was provided so they can understand how thorough that process is. In a cash offer, the buyer typically provides proof of liquid funds via a financial statement/bank or broker account in lieu of a pre-approval. You can consider offering the seller the same to reflect your funds for down payment.
2. Ask your PERL Mortgage Loan Officer to get a head start on the mortgage
PERL Mortgage offers a fully underwritten pre-approval, be sure to ask your PERL Mortgage Loan Officer about this option. Once you have this, your closing may be completed in a short time; sometimes as quick as 10-15 business days; providing you a strong offer with a quick close. If you’re buying a condo, inquire about the association, get a contact and see if you can acquire the declarations and bylaws. Provide this information to your PERL Mortgage Loan Officer to review.
3. Shorten the loan and appraisal contingencies
Ask your PERL Mortgage Loan Officer how quickly he or she can send an appraiser to the property, and how long the loan would take to turn around. The appraisal will be ordered the same day by a PERL Mortgage Loan Officer, turn times are contingent upon the appraiser’s availability.
4. Inspect quickly
You want to make sure the house passes inspection and is a sound investment so make contact with your inspector to let them know you are looking to make an offer and would like them to inspect the house within days of the accepted offer. This alerts them to make room in their schedule to allow getting the inspections done within days of having your offer accepted. This shows the seller that you mean business. It also gives them comfort that they’ll get over the biggest hurdle quickly.
5. Pre-order an appraisal
Ask your PERL Mortgage Loan Officer to request the appraisal on a rush so that it can be completed quickly. At the time your offer is written, let the seller know that the appraisal can be completed quickly, often within 3 days getting the appraiser out within 24-48 hours of coming to terms with the seller, it’s half the battle.*
6. Make a strong offer
Cash buyers almost always expect a discount from the seller simply because they’re offering cash and are a sure thing. As a result, the cash buyer often will make a lower offer. To increase your chances, top the cash offer. If you plan to live in the house for many years and it’s the home of your dreams, paying a little more to get the deal might be worth it.
7. Make yourself known to the seller
Some buyers write “love letters” to sellers in hopes of appealing to their personal side. If you’re competing with a cash buyer, especially an investor who plans to rent the home, it can’t hurt to get a little personal. The seller almost always wants to know more about the potential buyer. Handwrite a letter providing information about you and your family and why this home is perfect for you. Be sure to include comments on the beauty of the home and proximity to important qualities of the neighborhood, schools, churches, etc.
*A rush fee may be incurred; ask your PERL Mortgage Loan Officer the amount of this fee. For your own info, this fee could be $75 to $150 depending on the property.
Don’t hesitate to contact your PERL Mortgage Loan Officer if you have any questions or would like to receive more information on home purchase or refinancing options!