Cash-rich investors are one of the biggest obstacles prospective buyers have to overcome in the real estate market. An all-cash offer can simplify and expedite the sales process considerably, making it far more appealing than one that has yet to be backed by guaranteed financing. If you’re relying on the bank to purchase a condo or loft in Downtown San Diego, however, there are number of things you can do to increase your chances of beating an all-cash offer on your dream home.
Get an Underwriter’s Review
A pre-approval for a loan definitely carries far more weight than loan pre-qualification, but it may not be sufficient for convincing a seller to choose you over an all-cash buyer. You can add even more weight to your pre-approval letter by obtaining and presenting an underwriter’s review of your loan application. This review acts as an actual commitment on the part of the lender to back the purchase and shows all credit documents, assets, and income have already been taken into consideration.
Go on the Offense
It doesn’t hurt to have a trusted Downtown San Diego real estate broker on your team who can highlight the drawbacks of working with all-cash buyers. Cash-rich investors sometimes have a sense of entitlement and a desire to bargain. Moreover, the source of their investment monies may be questionable, and although eliminating the middleman from the financing process can expedite the sale, financed real estate transactions come with a bit more safety and security for all parties.
Make a Stunning Financial Presentation
Having your agent highlight the drawbacks of accepting a cash offer is certainly one way to give sellers pause for thought, but when it comes to beating an all-cash offer, defense trumps and offense each and every time. This means that you have to have your financials in order and a lender-backed offer that is difficult to refuse. Your debt-to-income ratio should be low, you should have steady employment, significant cash reserves, and the ability to put at least twenty percent down. If your financial profile is beyond reproach, you’ll have a fighting chance.
Pre-Order the Appraisal
Before writing your offer, try to pre-order the appraisal. This is something smaller lending institutions are likely to help you with as opposed to larger banks with stricter protocols. This lets the seller know you are willing to do all you can to speed things up. You can also schedule a home inspection in advance of submitting your offer in order to beat cash buyers to the punch. Many cash buyers wait to have their inspections performed before making offers, which often leads to lengthy inspection windows.
Formally Introduce Yourself to the Seller
It’s also a good idea to have your agent draft a letter on your behalf introducing you to the seller. You can use this as an opportunity to detail your purchasing goals, your intentions for the home, and why it is has caught your interest. Personal appeals like this can help you connect with people who have sentimental attachments to their abodes.
Offer More Money
At the end of the day, cold, hard cash will likely have the largest appeal to the seller. This, however, doesn’t mean you are without options. If you really want the home, think about increasing your offer or making a larger down payment. Because many cash buyers bargain for a discount on the purchase price because they’re paying in cash, you may be surprised at how easy some cash offers are to beat by simply offering a little dough.
Thinking about buying in Downtown San Diego? Let the experts at 92101 Urban Living help! We specialize in Downtown San Diego real estate and encourage you to take a look at our inventory, including penthouses, lofts, and condos in Cortez Hill, Columbia District, Gaslamp, East Village, Marina, and Little Italy. If you see something you like, give us a call at (619) 649-0368 and schedule a viewing. ')}