{"id":12204,"date":"2019-09-18T12:57:18","date_gmt":"2019-09-18T19:57:18","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=12204"},"modified":"2023-03-27T14:19:37","modified_gmt":"2023-03-27T21:19:37","slug":"buying-home-competitive-market-without-cash","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buying-home-competitive-market-without-cash\/","title":{"rendered":"Yes, You Can Buy a Home In A Competitive Market Without Cash\u2014Here\u2019s How"},"content":{"rendered":"

You may have heard that in a competitive real estate market, you need to make an all-cash offer to purchase your dream home. Across the industry, the same refrain repeats incessantly: cash is king.<\/p>\n

It’s true that having cash on hand improves your chances of having your offer accepted. According to home selling data collected by Redfin, a competitive all-cash offer improves your likelihood of success<\/a> by a whopping 97%.<\/p>\n

Further, cash offers are on the rise. According to the National Association of REALTORS, cash sales made up 23% of residential sales<\/a> in October 2018, compared to 20% the prior year.<\/p>\n

If you’re buying in a competitive housing market, the truth is that you’ll likely be competing with all-cash buyers in your home search.<\/p>\n

But what if you don’t have all-cash, or simply prefer to mortgage your new home? There’s still hope for you! Here’s how you can compete with cash, even if you’re relying on home financing:<\/p>\n

\"Cash<\/a>
Source: (Katie Harp – Pinterest Manager\/ Unsplash)<\/figcaption><\/figure>\n

Understand why cash is king<\/h2>\n

First, it\u2019s important to understand why cash rules the roost when it comes to home buying.<\/p>\n

One big reason: it\u2019s faster and more certain. Financing a home with a mortgage is not always a predictable process. Surprises can — and do — come up, potentially risking your ability to close on the home.<\/p>\n

In fact, the number one problem for contracts with delayed settlement? Issues related to obtaining financing. Financing woes account for 37% of delays<\/a>. Meanwhile, a cash offer indicates to a seller that the deal will close quickly and with more certainty.<\/p>\n

A pre-approval or pre-qualification can certainly help your case, because it shows a seller you\u2019re serious and ready to buy.<\/p>\n

The problem? All pre-qualifications and pre-approvals are not created equal<\/a>. Each lender has their own process, and frankly, some of these processes are more thorough than others.<\/p>\n

When a seller receives a pre-qualification or pre-approval letter from a lender, it signals that they might need to wait up to 40 to 60 days for the sale to close.<\/p>\n

That\u2019s because the buyer\u2019s financial data still needs to be verified and the loan needs to be underwritten. Simply put, these letters don\u2019t carry much weight because they often rely on incomplete or self-reported information about credit scores and income.<\/p>\n

Pre-qualifications and pre-approvals are just the first steps of many in the mortgage approval process.<\/p>\n

Work with a lender that underwrites upfront<\/h2>\n

So, how can you get a leg up over the competition? Work with a lender that underwrites upfront<\/a>. If you\u2019re up against cash buyers, you\u2019ll want your financial backing to be extra strong so you can stand out.<\/p>\n

That may mean removing uncertainties from the equation by showing the seller you have the finances to back your offer, and you\u2019re ready to move quickly.<\/p>\n

Essentially a conditional approval that\u2019s been fully underwritten carries a lot more weight than an unverified pre-qualification letter, and shows sellers you mean business and are a highly qualified buyer who\u2019s ready to get to the closing table.<\/p>\n

\"A<\/a>
Source: (Allie Lehman\/ Death to the Stock Photo)<\/figcaption><\/figure>\n

Write a letter to the seller:<\/h3>\n

Another tip for standing out among cash buyers? Write a buyer\u2019s letter to the sellers introducing yourself.<\/p>\n

Realtors say it\u2019s best to keep these letters short and sweet, and compliment features you love about the home. (Don\u2019t mention what areas you want to remodel because that might insult the seller!)<\/p>\n

The idea here is that many people have emotional attachments to their homes, not to mention established friendships with their neighbors.<\/p>\n

With that in mind, sellers want to know that buyers will be good stewards\u2014something that could set you apart from an investor who has plans to move renters in and out, or simply wants to gut and renovate the entire home.<\/p>\n

Header Image Source: (Alex Tan\/ Death to the Stock Photo)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Paying in cash improves your chances of having your offer accepted. But it’s not the only way! Learn how to compete even if you\u2019re using a mortgage.<\/p>\n","protected":false},"author":126,"featured_media":12207,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[629,634],"tags":[798],"class_list":["post-12204","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-financing","category-paying-cash","tag-how-to-beat-a-cash-offer-on-a-house"],"acf":[],"yoast_head":"\nHow To Buy a Home In a Competitive Market Without Cash<\/title>\n<meta name=\"description\" content=\"Paying in cash improves your chances of having your offer accepted. But it's not the only way! 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