Making an offer on a property? Competing and maybe wining Vs an all cash offer.

Now depending on the location and the market dynamics, cash buyers(i.e those that are not using a mortgage) currently account for a lare amount of all home purchases.  As a buyer who needs a mortgage to buy a home, it will be tough for you to compete against an all cash offer, especially where multiple offers abound.  Now giving you insight from  the sellers side, an all cash offer eliminates both hassle and risk as do offers without appraisal or financial conditions, which in a hot real estate market can also reduce your chances of success.  There are however, some ways to make your offer more competitive.

These for example are:

• Try as much as possible to avoid multiple offer situations
• Ask your agent to help you find off market properties
• Consider waiving the financial contingency clause which allows you to cancel the contract if you don’t receive loan approval or if an appraisal comes in below expected value.
• Increase your down payment. According to a recent article in the Wall Street Journal, securing a pre-underwriting letter may make your offer more attractive. Unlike a pre-approval letter, this one has teeth. It contains deep income and asset documentation, which sellers like to see, as it means you are a serious buyer, plus it may move you through the approval process more quickly. Many cash buyers are overly confident and therefore submit unrealistic, low-ball offers. So, while cash is worth a 2 percent to 3 percent discount, sellers annoyed by the low bid might just accept yours instead.