How can a home buyer with a loan compete against those all cash buyers? That’s a difficult question and a tough proposition, just ask those mortgage buyers that have repeatedly lost out to cash buyers. Are there actually any way possible that a loan can be as attractive to a seller? What can buyers do in markets where cash is king?
There are multiple advantages that a cash buyer has over a buyer obtaining a loan. The contingencies that would protect a buyer in the purchase contract, such as loan and appraisal are not a necessity with the buyer with sufficient funds to close escrow. The other advantage these buyers have is the ability to purchase and close on the home very quickly. How can a home buyer with a mortgage compete against those obstacles?
Home buyers have to go into the home buying process with a different mindset this year than anytime in the last several years. Understanding the disadvantages a loan versus all cash offer have is the first step in properly competing. Using the assumption that every all cash offer doesn’t win out every time is also an integral aspect to remember.
One of the plusses that a cash offer has is the simple fact they can close escrow within 15 days. That’s hard to compete against, but there are lenders that can accomplish that feat if a buyer has taken the next step past pre approval. Do your comparison shopping up front and decide on the lender that gives you the best deal financially and timing wise. If your offer is accepted and the buyer has gotten past the pre approval stage, closing escrow in 15 days or less is very possible.
The biggest advantage the cash buyer has is quiet simple, there is no loan. Therefore there is no loan contingency needed. Using the suggestion above of going past the state of pre approval should make removing the loan contingency in the purchase contract an easy task. Assuming a buyer has to pay above the sellers asking price, like many offers are today and the buyers realtor can sufficiently justify a value with comparable sales, then removing the contingency for apprasial a mundane point. Please visit www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blog and easy access to view local area homes for sale in Davis, California and the surrounding communities.