Can You Compete With All-Cash Buyers

Not too long ago when I was house hunting it seemed like I was getting outbid and losing every offer I made to an all-cash buyer.

Here I was trying to purchase my first home, I saved and saved up my down payment and was getting discouraged by individuals who would come in and make these offers that I could not compete against.

If this story rings true keep reading below.

What I eventually learned was that competing with cash buyers isn’t impossible, just difficult.

One thing you will need to accept is that some sellers will take the cash offer every single time and there’s nothing you can do about it.  But, for others, you still have a solid chance at the home, but you have to have a solid strategy and you have to be prepared in advance.

Here are a few ideas on how to create your strategy.

Figure out the seller’s goals

Determining what’s most important to your seller, ie., having a family move in, keeping a tree they planted with their first child, or any other quirks can be key to getting your home, even when you’re competing against an all-cash buyer.

Consider your contingencies— What is a mortgage contingency?

A mortgage contingency is a clause in your contract that protects any monies that you put down.  When you sign a contract to buy a house, you typically put down 1% of the purchase price, a mortgage contingency plan enables you to get your 1% down payment [or earnest money] back if you are declined for financing.

If you consider waiving your mortgage contingency, you are essentially saying is that even if you don’t get approved you are going to buy the house, and if you don’t, you will forfeit your down payment/earnest money.

Going this route is like calling a bluff.  You’re taking a gamble by either committing to buy the home or being ok walking away from your down payment/earnest money.

A buyer's hand all full of cash to compete with you.

Sellers find this attractive because if they have two offers available to them and one has a financing contingency, and one does not, more often than not, the seller will take the one without the contingency every time.

Most sellers are not interested in waiting for a couple of weeks waiting for their buyer to get approved, and potentially having to list their house all over again.

Another way to compete with contingencies is to forgo a home inspection or secondary appraisal.  It’s important to know that this isn’t necessarily the best strategy. Without a home inspection, the property could have issues that would impede your purchase and had you known about the issues in advance you might not have made a decision to move forward.

Get pre-approved

If you want to be considered a serious buyer it’s best to get pre-approved and offer a strong pre-qualification letter from your lender.

If you have a significant down payment and have excellent credit, this might be your winning strategy. After all, sellers often go with all-cash because they don’t want to deal with any hassles during the loan process.

Make it personal– Write a love letter

Make your purchase personal to the seller; try including a letter telling the sellers about you and your hopes and dreams for their property, remember there’s still an emotional element to selling a home.

When you compete against an all-cash buyer, this can be a big challenge, as most sellers view an all-cash buyer as a simple and fast way to sell.  If you can make a case that you will love the home as they did and stress that you don’t have any intention of taking away the homes’ personality, you could convince the seller to give you an opportunity.

Don’t give up hope.


Please call or email us today if we can offer advice or help you.

The Certo Team
55 N. Arizona Place
Suite #103
Chandler, AZ 85225

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