You already know: it’s hard out there for buyers. From soaring home prices to increased demand, your clients are also up against a surge of all-cash offers.
Many buyers might think that the only way to compete against cash offers is by waiving contingencies — which can lead to a whole lot of heartache and even buyer’s remorse. But there’s hope! Here are 5 ways to help your buyers compete with cash offers that don’t involve waiving financing or inspection contingencies:
Push For “Fully Pre-Approved”
Educate your clients on pre-qualification, pre-approval and a fully underwritten pre-approval. If your clients are fully pre-approved, you can position them as the best way for the sellers to close fast, as a majority of the work is already done by the bank. And because the money is guaranteed, you can also highlight that a fully pre-approved offer is equivalent to a cash offer.
Meet Their Motivation
Are the sellers relocating for a new job? Have they already purchased a home and eager to move fast? Get to know the selling agent to find out the “why” behind the move, and see how your clients can help the seller’s closing process, such as streamlining transaction formalities to fit the seller’s timeframe.
Get Serious About Deposits
Encourage your buyers to increase their earnest — or “good faith” — deposit. Typically, this deposit is about 1–3% of the home price, and it gets added into the down payment. By upping this deposit, it shows that your buyers are serious about wanting the home, and that they’ll go above and beyond to get their offer accepted.
Check Out Different Neighborhoods
It’s not ideal, but encourage your clients to be flexible by looking at nearby neighborhoods with lower listing prices and less competition. Sure, your bottom line may take a small hit, but you’ll have a stronger chance of closing a sale — and your clients won’t overpay for a home in a popular neighborhood.
Be The Backup
If you got the news that another buyer won the property, your clients still have a chance: ask to be the backup offer. In the event the buyer falls through, they’ll be next in line to get their dream home.