Many Americans, especially first-time homebuyers, rely on a mortgage to help finance their home. It’s no secret that all-cash offers are difficult to beat in today’s real estate market; with money upfront and quick closing times, they’re the perfect case scenario for home sellers. Here are a few things that will help you beat your competition for your dream home.
Get pre-approved. Cash buyers are so appealing because the last thing a seller wants is a deal falling through. Sellers want to know your offer is secure and that you are well qualified to purchase their home- the best way to show them that is a pre-approval letter from your lender. This means your finances have been verified and the credit has been checked, all you need to do is find your dream home.
Offer above asking price. Another reason cash buyers are so appealing is that they can pay cash upfront, but sometimes, they will try to get a discount on the asking price. While you may be ready to break the bank for a house you love, start by looking at homes at the bottom of your price range, giving you more wiggle room in case you have to go over asking price.
Increase your earnest money deposit. Buyers can easily make offers on as many properties as they want. While an earnest money deposit isn’t required to put an offer on a house, it shows the seller your intent to go through with the transaction as long as there is nothing seriously wrong with the home. Your deposit will be put in an escrow account so neither you nor the seller can touch the money until conditions in the purchase agreement are met. Typically, these deposits can go towards your down payment or closing costs once the seller accepts your offer.
Include an appraisal gap guarantee. There is always a chance the appraisal for the home comes in under listing price. If you are serious about purchasing the home regardless of the appraised value, the seller will at least get the asking price, making your offer stand out.
Waive any contingencies. While risky for the buyer, this makes the process easier for the seller. If you choose to waive the financing contingency, worst case scenario you wouldn’t be able to back out of the sale if your mortgage loan falls through. If you choose to waive the inspection contingency, the home will not be inspected before buying. Regardless of which is the best option for you, it’s important to talk to your agent before proceeding about the risks and rewards.
Have more questions about the preapproval process, or need help financing your home? McLean Mortgage is here to help! Check out our other blogs to help you in the search for your dream home or contact a mortgage advisor today.