Today we're going to talk about competing against cash offers.
Hey, this is Los Angeles, and there's a lot of cash deals out there. Sometimes it's foreign money being snuck out of their own country. It might be someone's life savings. Or a loan against another house they already own... like a home equity line. Or, they might be selling their previous house and using that cash to buy something else.
All sorts of reasons someone might have a bunch of cash laying around.
Understand that, and you're one step closer to competing against it. Let's see... why would someone accept a cash offer over yours? Most likely, it's because You're getting a loan to buy the house, and there's no guarantee you'll close. While a loan is busy with underwriting and appraisals, all cash deals don't have to worry about any of that.
First, you have to be a "sure thing", or as close to it as you can be. What does that mean? Well for starters, understand that all "pre approvals" are not created equal. Some lenders barely skim your finances, while others really run you through the ringer. You want a pre approval where the only thing left to do is evaluate is the property itself. If your loan is golden before you even write an offer, this will put you leaps and bounds ahead of your competition.
Next, how quick can you close? About a year ago, there were brand new regulations that came out, and it was taking most lenders 45 days to close a loan. But today, the good ones have learned how to jump those hurdles, and can close in two weeks if you really hustle. This is because you've done all the hard work up front.
So... if your loan is golden, and you can close super quick, what's the last thing?
The Price. The good news is, most cash buyers think they're "gods gift" to real estate and sometimes they write low offers. They forget it's all the same to the Seller once it closes. Cash, loan, really doesn't matter at the end of the day.
Sellers are looking for the most money, in the shortest number of days. And they're scared to death about picking the wrong Buyer. Consider that when you write your offer, and you'll do just fine!