There is a ton of recent media about buyers paying all cash for houses. This is nothing new. Buyers have been paying all cash for houses for a long time. This is true lots of buyers are paying all cash right now.
This is a big media issue now because financed buyers are complaining about how they are being squeezed out the market by cash buyers. This is untrue lots of financed offers are being accepted over cash.
Financed buyers are not getting their offers accepted by sellers because their offers are not acceptable. This is their own fault.
We all love to blame people when we don’t get what we want. “It’s the agent’s fault.” “It’s the cash buyer’s fault.” “It’s everybody’s fault but ours because we don’t want to listen to our agent’s advice.”
It’s not the buyer’s real estate agent’s fault they are looking for houses that are too expensive or top out their loan limit. That’s their fault for not being realistic or taking bad advice.
It is the buyer’s fault for not being 100% clear that they are going to be unable to compete against cash buyers and other financed buyers until they follow advice, get realistic about what they can afford, and write solid offers.
I’m just keeping it real from someone who lists a lot of houses and represents a lot of buyers.
Here is how the offer presentation to the sellers works:
All offers must be presented. These days we are seeing multiple offers and that means a stack. We go through the offers with our sellers and cull out the ones that are unrealistic, unacceptable, or sloppy.
After the initial cull is gone from the pile, the typical discussion between my sellers and me when looking over offers to consider runs something like this:
“Here are three acceptable (meaning at or over asking price) financed offers, a cash offer for $10,000.00 less than you are asking and another cash offer for asking price.”
“Which one makes me the most money with the least amount of hassle?”
“The highest priced financed offer will bring you back the most money and it will close because the agent writing it is realistic and the offer is clean.”
“Let’s go with that one then.”
Easy, see how the over asking financed offer worked in that situation and beat out the asking price cash offer?
Here is how to write a financed offer that will get accepted:
1. Write a clean offer.
This means do not nickel and dime the seller by asking them to pay for anything that is not customary.
2. If asking for closing costs, increase your offer by the amount you are asking for.
This means the seller will be able to give a credit to cover closing costs without seeing their bottom line effected.
3. Provide a proof of funds.
Show the seller you can afford the down payment and closing costs.
4. Use a reputable lender.
A major bank or direct lender is always preferred to a mortgage broker or internet broker.
5. Write a cover letter or “love letter” to the seller.
Sellers like to know the house they loved and called home is going to go to people that are committed and really enthusiastic about living there.
Bonus points go to buyers that have met the listing agent at an open house. Introduce yourself to the listing agent at the open house. People like to work with people they know and have some connection with.
Want to write an offer that works for sellers? Want to talk to me more about real estate? Email me at email@example.com