Competing Against an All-Cash Offer

In a seller’s market, much like the one we are in now, homes that show well and are priced properly are finding themselves in multiple offer situations.  This is great for them, but its a tough spot of the buyers. In the recent months we have seen buyers lose a home even when bidding significantly above list price due to all this competitions, and one of the hardest things to overcome when you have competing offers is the all-cash buyer.  When you find yourself going up against a cash offer it may seem like there is nothing you can do to get yours accepted. Fortunately that is not true.


When it comes to competing against a cash offer, if you are in a good financial position then you still have a chance.  Are you putting 20% down? Well Employed? Have little debt and good credit? If so, you’re still in the running. So long as your in good standing, these following points could still allow your offer to win.

Overshare your information:

Giving additional transparency about your situation allows the seller to remove some of the uncertainty associated with a loan.  When giving your offer if you allow the lender/agent to share your financial information along with the pre-approval letter it gives the seller this peace of mind.  Sharing how much you make, how much you have in the bank, and even showing bank statements or credit report could go a long way.

Letting a seller know more about yourself can go beyond your financials as well.  Adding a good letter to accompany your offer lets the seller understand your personal situation could make a difference.  Simply explaining who you are, why you love their home, and what your goals with the house are allows them to connect with you a bit more.  While this might not always change things in their mind, some sellers will empathize with your situation more than an investor with a cash offer.

Shorten your contingencies:

A seller’s worst nightmare is to have a contract fall out during the home stretch.  Shortening or expediting your contingencies take a lot of this worry off the table. Ask your lender how fast they can get their portion finished and show that in the offer.  Some lenders, like Mclean Mortgage, have the ability to skip over their appraisal process completely if nearby homes have appraised and closed recently nearby.  If this isn’t available for you, pre-ordering an appraisal could be possible as well. This same thinking works for the home inspection as well.  Showing the seller that you can get an inspector in within a few days allows for less of a worry in their minds.

Increase your offer:

When sellers get an all-cash offer it is typically a bit lower than offers which aren’t.  This comes from the fact that a discount is usually expected from that kind of buyer due to being all-cash.  This expectations could be an opportunity for you. A few thousand may not make a difference, but increasing your offer by a few percentage points absolutely could.  Of course, this could raise your long-term mortgage, but if you know you will be there for an extended amount of time then it may be worth it.

These three different areas allow your offer to compete with an all-cash offer or even a multiple offer situation.  It may not always be enough, but these are the points that sellers care about and allow you to be more attractive to them.  Naturally, having a good agent and local lender with a lot of experience goes a very long way in helping you determine how to improve your offer.  If you have an questions about improving your offer to beat an all-cash buyer, The CAZA group is here to help.