Cash Home Buyers

Cash Home Buyers

According to Mercury News reporter Pete Carey, during June 2011 close to 60% of residential transactions in Silicon Valley were Cash buyers!   This jives with our own experience where we are writing more offers for Cash buyers than Contingent offers (buyers w loans).   So, the question to ponder is how can we help our contingent buyers compete with Cash Buyers in the market.  Here are some suggestions:

1) Know as much about the seller as possible.  If this is a Bank Owned (REO) property, find out if the selling bank has any seasoning requirements on cash purchases. Some sellers now have deed restrictions on flips, so if a cash offer was selected, don’t give up.  It does NOT mean that the buyer will proceed with the close due to deed and flip restrictions.

2) Write a clean offer. Granted your clients will have appraisal and loan contingencies, but if the loan is from a direct lender and you are comfortable with their pre-approal and underwriting guidelines; then it might be a calculated risk now to require a loan contingency on your offer.

3) Build a relationship with the seller’s agent.  Ask them to take your offer as a backup.   Or if they don’t have such an option, offer them a chance to notify you if the cash buyer backs out.

4) Research the property and develop a through understanding of your buyers plans for the property.

Finally, educate your buyers that this is a marathon and not a sprint to finish.  Those who are patient, will do much better than those who are rushing to get into the 1st property they fall in love with.


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