I know many Realtors who have been having issues with homes not appraising for the contract value, and thus preferring the cash offer. There are, however, other creative ways to distinguish you and your offer from competing offers. This is where it pays to have a Realtor who knows how to do more than just submit the contract documents. Feel free to contact me and I will explain in greater detail.
Realtor & Branch Manager
HomeSmart Real Estate
The fact is that about half of the offers we get are poorly written, are not followed up with a phone call and ask the seller to pay for everything. That is not the way to represent a buyer. A simple 30 minute in office consultation would avoid most of the problems that buyers endure. If a buyer is properly informed of what the market is doing, they can make better decisions.
We also work with buyers and we make sure that our buyers are aware of the current market trends and what to expect. We also let them know where we need to be when writing an offer. Once we get an offer ready we make sure the listing agents have an understanding of our client and our ability to close. We write complete and clean offers and we make sure we have everything completed and sent in one file. We always follow up with a phone call to the list agent and we talk to them at a time that they can review the file with us. last year we had a 93% acceptance rate and many of our buyers were using programs like "Home in 5" and other low or no or down payment or down payment assistance programs.
It doesn't matter if the buyer is using a down payment assistance program, 3.5% down FHA, 20% down conventional, hard money or cash, at the end of the day the seller just wants to net as much as possible. I have agents all the time that submit a cash offer that is $5k, $10k or more under list and state "But its CASH and a Quick Close!" You have to ask yourself, is 20 days worth $5, $10k or more? If the property can be financed and the seller can net more, that is what they are going to do most of the time.
Feel free to contact us to see how a buyer can be successful with any type of financing.
Currently in today's market, a buyer with a conventional loan (20% down) CAN compete with cash buyers provided the offered purchase price falls within a safe range of the local comps.
For an edge when faced with multiple offer situations, additional steps could be taken by abbreviating the number of days in the inspection period or by putting down a sizeable earnest money deposit. Flexibility on the closing date and the ability to close as quickly as possible also enhances your position. When financing this can be accomplished by using our local, smaller mortgage banks.
Let me know if I could be of assistance to you in directing you to a reliable lender and helping you find and negotiate a deal for your next home!
Terry Colosimo, Executive Sales Agent
Keyland Fine Properties
7033 E Greenway Pkwy
Scottsdale, AZ 85254
However, frequently cash buyers believe that they can make an offer substantially below the list price and still get acceptance from the seller. This simply isn't the case, especially in this market. In fact, due to the low inventory or quality homes in quality neighborhoods, cash offers have become much more common. In fact, multiple cash offers for a home are not unusual.
Regarding your question about a sizable down payment, buyers making offers with sizable down payments certainly do have a shot. However, the seller wants to see a sizable earnest money deposit, as well. And keep the request for seller concessions like paying the buyer's closing costs, home owner's warranty, appraisal fees, etc. to a minimum. Again, due to the market conditions, a buyer using financing is frequently at a disadvantage. So, a buyer using financing typically has to be more aggressive in an offer to win.
Let me know if you want to discuss other ways you can be successful in purchasing your dream home in this very competitive market.
REALTOR and Associate Broker
West USA Realty
A 20% down buyer should not waive the appraisal contingency because that could be very costly. Instead they should write their offer as strong as possible and change the contract to do the appraisal first. That way if there is an issue they have not spent money on both an inspection and an appraisal.
If you really want the house play to win and make your strongest offer off the bat.
TOP 1% West USA Realty
In Maricopa County the percentage of properties recording an Affidavit of Value and purchased without financing was 33.4% in March 2013, down from 39.8% in March 2012.
Feel free to contact us for the latest properties currently available
Gary and Claudia Scott
Realty ONE Group
Just had a 20% down buyer who won the house by bidding a percentage over asking price with 3 other offers.
Hope this helps.
Terry S. Smith, Broker Associate
47 Year Arizona Resident
Rain Dance Realty