I've been trying to buy a house but those cash buyers are making it way too difficult for the sellers to even consider my offers.

Asked by Rhayward, Brooklyn, NY Wed Apr 17, 2013

Are there any tips to beat them???

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Javier Meneses’ answer
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Sun Apr 28, 2013
PNC is absolutely not the only bank who issues a conditional commitment before you find a property or execute a contract. At the end of the day it will not give you the same buying power as a cash buyer. Cash buyers are not at the mercy of appraisal reports, title reports, etc. You can be pre-approved or committed based on a DTI which itself is based on a limited amount of real estate taxes, and the property you find could exceed that amount and there goes your commitment.

All you can do is use what you got. You're a buyer who, like the majority of buyers, is financing. If you find that you're constantly in competition with cash buyers, all you can do is make stronger offers. Cash buyers, more so investors, expect to pay less than you, so they usually offer less, so you'll have to offer slightly more and find a way to make it work.

Investors look to buy distressed sales and properties. Even REO properties that go in the market usually accept offers from buyers who are buying primary residence over investors for a specific time frame. So find a way to look for the properties that are within your reach.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Wed May 1, 2013
I'm confident you are aware you have not provided sufficient information for anyone to provide any actionable direction.
Of course you think it 'cash buyers' that is creating your problem.
The reality is your purchase offer(s) are not competive.
There are MANY reasons for a purchase offer to be non-competitive.
These reasons are not always 'cash buyers.'
Wake up and smell the coffee.
Submit an offer that fits the expectations of the seller and not polluted with exits and contingencies.
It"s not rocket science.
It's not magic.
Work with an experience real estate professional.
Follow their guidance.
Be adaptable. agile and able to compromise.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
3 votes
"Submit an offer that fits the expectations of the seller"
All that quote means is the so-called real-estate professional wants you (the buyer) to go in at asking with no negotiations, inspections, or contingencies. Do whats best for you, as the buyer, not what they think you should do. Remember real-estate agents are in for the highest commission, not your best interests.
Flag Thu Jul 16, 2015
Really? The last offer we made was on something that sat there for months.
The moment we called, we were told they "had an offer" and we need to offer "competitive price".
Our answer was, call when you take our price. And they did. There never was any other offer at all. It never sold.
W did not buy it because we found that they wanted us to give them 5 feet easement on one side, cutting us off the driveway, because they had build a hot tub on what was to be our property, with no permit and wanted to keep getting to it through our property.
They also wanted an easement on the other side where they carved a piece of land off to sell separately.

This is what real estate agents call"competitive offer".
We called it a scam .
As I said, it never sold.
Flag Fri Jul 3, 2015
Right on! Cash buyer here, what pisses me off are fannie and freddie that give loans to people with 3% down. This causes price competition which drives prices up. Cash is not king no matter what you think, the only good deals I get are houses that are un-financeable due to the need for major repairs.
Flag Thu Jul 2, 2015
The results were that both agents got their "sales" commission checks for doing zero. My buyes agent was a royal PAIN.....and told me NO at every step. The listing agent was also a pain until the SELLER TOLD HER WHAT SHE WANTED to do. Both agents fought the transaction to make it more complex than it was. This is why sellers prefer cash buyers---no phoney promises, fancy talk and delays followed by excuses. After escrow I invited the seller over for dinner----in her house of 30 years. She advised me I made her VERY HAPPY for reducing the stress she was under. She happened to have three of the FIVE D's of real estate: Death, divorce and debt...and I was here to help her. I also earned 30% equity compared to market value. Note all the other homeowners and their agents HATED me---for "killing" their comps. Too bad so sad.--it's just BUSINESS.
Flag Thu Jul 2, 2015
Wow, not enough information to provide actionable direction, but enough to make assumptions that they are not making competitive offers and submitting offers "polluted" with exits and contingencies?

Yes, working with an experienced real estate professional is a good idea. Just make sure it's one that acts in a professional manner.
Flag Thu Jul 2, 2015
Interesting response. I am a cash buyer and the last person I ask for help is a real estate sales agent. Of course if the property you want to buy is "listed" you must wait until the listing expires (or sold) or work with the listing agent or buyers agent in presenting your offer to seller. In my last transaction the "Buyers agent" .was only representing himself and not me. So what to do? I found the seller and talked with her directly. She in turn directed her listing agent to WORK WITH ME. I contacted the listing agent and submitted a written offer with NO CONTINGENCIES and LARGE Earnest Deposit, and told her to IMMEDIATELY contact the seller with this written offer and Earn Deposit Check. because she was expecting it. This was kNOnT a Short sale and my offer was less than what she owed on the mortgage. My offer was over 30% BELOW the asking price. My offer was accepted by seller AND her bank. I had to contact the bank to make my pitch for acceptance. Done DEAL---
Flag Thu Jul 2, 2015
Thats a very rudely crafted response. If he hasnt provided enough info for you, why did you assume his offers are not competitive and full of contingencies. Agents like you, make me smile when the market crashes. Remember how the arrogance faded away in 2008-2011, and you were all crying poor? Karma....
Flag Thu Jul 2, 2015
Michelle Mas…, Home Buyer, West, TX
Fri Jul 3, 2015
Yes, You can beat my cash offer with a finaced offer - The number one way is to offer no inspections or that even with inspections you will not back out of contract.

Many people think that if a home is listed for say 80,000 by the foreclosure bank that will be the price they can get it for. What many banks do is list a house LOW to get people in to look at them - its a numbers game. Be prepared to go 10,000 - 20,000 over listed price. Look and see what the other houses are going for in that area.

I have bought several homes in foreclosure. The last one two finaced offers had the higher price being offered then my offer. I held out on my price because I offered no inspections. Banks want a fast sale. Uncomplicated sale. Homeowners don't want to invest time to have an inspection come back requiring the homeowner or bank to have to correct the property to sell.

I'll throw in another tip. Find out who the REO agent is. Go to the county website see who the bank is and call the bank and ask for the REO agent contact information. Once you get that information send an email stating that you are interested in property X, that you will be submitting an offer and its not about winning or losing the bid but that you want to be sure the agent sees your bid. Then include a picture of you- your family - Mine was in my signature - WHY? This way you are not a number but you and the REO agent is making a connection.

Best wishes.
3 votes
Rhonda Holt, Agent, New York, NY
Fri Feb 14, 2014
Hello, if you're out there investing then most likely an all cash buyer will get the deal because they don't have to get financing from the bank and they close within a few weeks instead of months.

But cash buyers are beat out sometimes by regular buyers because they usually put in ridiculously low offers that will sometimes insult the seller. Of course if your offer is stronger and you have all your financial documents in place, good credit , a prequalification for a loan is in place, you have a lawyer then you can definitely beat a cash buyer. So you have to have things ready to go and be ready to move on the deal fast so the seller doesn't reconsider.

Also cash buyers usually take properties in any kind of condition and will even take properties with tenants because they have so much cash on hand to handle situations like these. This is definitely hard for a person that has to get financing because you will most likely get an inspection and will want to renegotiate the price and ask for repairs or replacements. Not getting an inspection can be extremely risky and I do not recommend it because you will need alot of capital to do repairs and replacements after your purchase and may end up in serious debt and loss.

So before you go after a property a cash buyer wants be sure its the type of property that's right for you and that you can handle all that comes with it. Good luck!
2 votes
Jose, Home Buyer, Brooklyn, NY
Thu Jul 2, 2015
1. Cash buyers do not need an appraisal.
2. You need an appraisal, have your realtor prepare a CMA, make a offer at full asking/value
3. Cash buyers do not need inspections
4. you need an inspection, take property AS IS or walk, if you ask for to much seller will go with cash buyer who doesn't ask for anything.
5. Do not ask for closing costs
6. look for properties that are not a steal, that is what cash buyers look for. stop competing with them for the same property
Investors want properties they can make money on, you want a property you can live in, do not co mingle that.
1 vote
John Russo, Home Seller, Desert Hot Springs, CA
Thu Jul 2, 2015
My wife and i had looked at homes this past and found one in Florida that was a good investment. We offered full price, were pre approved and had finances available to proceed. No one told us that a cash buyer was going to put in an offer. Next case.

When the bottom fell out we had sold our house just before all hell broke loose. We rented for a year then went searching for homes again out here in Southern California. The housing inventory was high with foreclosures and short sales but not all the homes were equal as we know. We looked for a home in a an area we had lived in and searched the MLS daily. Seems that houses suddenly appeared that the broker claimed was listed for a few weeks. These were priced low to sell, upgraded and very desirable.

There were some problems as some were already sold to cash buyers before being listed. Other homes the brokers were hesitant to show but instead gave us wrong keys and incorrect lock box information to keep us from gaining entry. They eventually showed up with an investor who had already agreed to purchase the home. The brokers were our problem and had no morals lying to us about anything and everything to get that cash sale.

The escrow companies out here were having a field day with us. They tripled charged for many line items by renaming them so people paid thousands more for closing cost. The state eventually caught on and took a few banditos to court. So how do you beat the cash offer? Find honest people to deal with. Best of luck.
1 vote
Alexandria K…, Home Buyer, New York, NY
Thu Jul 2, 2015
If you find a property you really want, write a letter to the owner introducing yourself and how this property meets your personal situation. My son beat out three better offers because his wife wrote a letter to the owners. The owners felt that meeting their family's needs was worth more than selling to an investor.
1 vote
Anna M Brocco, Agent, Williston Park, NY
Wed Apr 17, 2013
What is your agent advising...always make your best offer within your means.
1 vote
Hiker55, Home Buyer, Brooklyn, NY
Thu Jul 2, 2015
Despite the somewhat nasty reply from the Remax realtor-I agree. I had everything in place, and offered $10,000.00 over the asking bid, and lost to an all cash buyer. I was told by a realtor after the fact, that when a house is owned by a bank-which was my situation, the bank always goes for the cash loan. He further stated that you can always say you have cash, and then proceed with the loan once you win the bid.
0 votes
Susan Gay, Home Buyer, Vidor, TX
Thu Jul 2, 2015
Save your money and pay cash. I pay cash for houses that I buy. It took me a lifetime to save the money to pay cash. It is hard to beat a cash offer. Quick closing, no inspection is needed, no survey is needed, the seller doesn't have to wait for you to get your loan in order. Find a house that a cash buyer doesn't want and buy it. It is the nature of the market. The only other possibility I can imagine would be to add a letter with your offer telling the seller how much you love the house. Good luck.
0 votes
Mike Slatton, Both Buyer And Seller, Tampa, FL
Thu Jul 2, 2015
We buy a lot of houses cash - http://btgh.com - but most of our offers are on houses that you wouldn't want to buy anyway. There are also a number of hedge funds like BlackStone & H4R buying real estate all over the United States. They buy houses based on very specific criteria - usually block homes built in the 80's or newer, 3 or 4 bedrooms, between 80k to 250k. They employ local investors and agencies to help them search for properties. These are the "cash buyers" you're probably talking about.

The reason they're so successful is because they know the market, call on the properties as soon as they show up on the market, and they offer the asking price or market value of the house. The way you can beat them to one of these houses is to watch for new listings like a hawk, and then make offers over the phone "contingent upon inspection".
0 votes
In the Bay Area, it is 40% cash buyers. It has nothing to do with BlackStone. There isn't much a working person can do to compete with ultra wealthy folks who offer all cash with no contingencies. Realtor in Florida is nasty, and out of touch.
Flag Thu Jul 2, 2015
Tim Reynolds, Home Buyer, Silver Spring, MD
Thu Jul 2, 2015
Make them "an offer they can't refuse" if ya know what I mean
0 votes
Idolidia Glez, Home Buyer, New York, NY
Thu Jul 2, 2015
No tips..no answers.money talks!!!!
0 votes
Rhonda Holt, Agent, New York, NY
Fri Oct 25, 2013
The only way to even stand a chance against cash buyers who do not have to get financing is to get everything you need in order and ready to go.

When you go out to see a property especially in the early phase make sure you put in a written offer right then and there if you're sure about the property, you should have gone to a lender for a prequalification that you are walking with and have your mortgage lender info, have your credit report on hand with all three scores and no older than 3 months old, have proof of income ready, have your lawyer information, to move faster sign your contract first and have it contingent upon the inspection.

I hope these tips will help you, its just about getting to the property early, putting in an offer slightly higher than a cash buyer and having all your paperwork and contact information in order.

Feel free to call me anytime.
0 votes
Scott Godzyk, Agent, Manchester, NH
Mon Jul 22, 2013
Make a better offer. Offer your best price first, close within 30 days and leave out contingincies.
0 votes
Rhonda Holt, Agent, New York, NY
Thu Jul 18, 2013
I know exactly what you mean because cash buyers are out like vultures right now and it is hard to beat them when they are not dealing with a bank and all their requirements and they can close faster.

But you have something over them and that's a more realistic offer price. Most agents are annoyed by cash buyers because they come in with their fast talking and then give you a super low price and agent and seller loses money on the deal.

Another way you beat cash buyers is to call on a property immediately forget emailing just pick up the phone. Once you get in to view the property let the agent or broker know how much you want it, but not in a desperate way.. Then make sure you have your pre-approval in place with your bank rep's number, lawyer info, credit report and copies of your income to let them view on the spot so they know you are super serious about the property.

Don't feel that cash buyers can beat you all the time because I pass them by based on the things I said above and work with a buyer that really wants the property and will do and provide the information I need to get it. Hope that helps!
0 votes
Fine---but by YOUR own admission---cash buyers want lowball prices---this tells me you pay HIGHER. You can profit when you BUY low and sell high ---there are MILLIONS of properties for sale. Why pay more than you must? I am a cxash buyer---and make more money on THE BUYING part of a transaction. Sellers can always lose money--I know-I am one of the people they sell to. buy Low--Sell High---its just business. I ALWASY look for the FIVE D's of real estate--more important than asking price. When a person sells a house they are announcing to the world---that they (SELLERS) would rather have the money than the house. Buyers tell the world --money means NOTHING to me---I want the house instead of the money
Flag Thu Jul 2, 2015
Not all cash buyers are investors. We were cash buyers when we bought our home here in n california. We had sold our home in England and had that money available. We will have that money available again if we decide to sell here and move so once again we will be cash buyers. We buy a house to live in just happen to be in our late seventies and because we had cash available when we emmigrated we will always be CASH buyers. Too much generalisation here fro real estate agents etc.
Flag Thu Jul 2, 2015
opondomusa, , 10020
Thu May 9, 2013
Below are some great tips how to beat an all cash home buyer:

0 votes
Curly Sue, , Texas
Wed Apr 17, 2013
Offer more money...
Be flexible on closing date...
0 votes
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Wed Apr 17, 2013
Also, like Kathryn said, KEEP LOOKING!
0 votes
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