Cash is king in most business transactions, and it’s no different with mortgages. A cash offer can be very tempting for a seller because there is no risk of the buyer defaulting on their payment.
However, all is not lost if you’re going the way of the mortgage. You’ll just want to follow the steps below to make sure your offer is as appealing as possible.
1. Get your lender to back you up
A pre-approval letter from your lender is a must. It will also help if you can get your lender or real estate agent to show the seller financial statements that clearly display you’re a qualified homebuyer.
2. Have an appraisal ready
You don’t want to make the seller wait for your loan to be approved. Talk to your lender and find out exactly how fast they can get an appraisal done on the property, and when the loan will be approved. With some banks and mortgage brokers, it’s even possible to have an appraisal pre-ordered and ready to go.
3. Get inspections done right away
You don’t want to make the seller wait for anything. So as with everything else, get your inspection done as soon as possible.
4. Make a higher offer
When people pay with cash, they usually expect a discount. This provides an opportunity for non-cash buyers to make a higher offer. Paying more isn’t ideal, but if it’s what you have to do to get your dream home, it could be worth it.
5. Put more cash down
If you have some extra cash, consider making a higher down-payment. Instead of getting a mortgage for 70-80% of the purchase price, you could drop the financing down to 60-70% and potentially make your offer more appealing.
6. Make it personal
It’s not uncommon to write a letter to the seller, explaining a little about yourself and why you would love to purchase their home. A seller almost always appreciates knowing more about their potential buyers, and if you can strike an emotional chord, your chances of closing the deal could increase.
Bottom line:
At the end of the day, being flush with cash isn’t what makes the difference; it’s convincing the seller that you are a sound candidate to purchase their home.
If you have your finances straightened out, get things done in a timely manner, and can make a personal connection with the seller, you could very well beat out a cash offer.
source: totalmortgage.com
