How to Compete Without Cash
As cash buyers continue to inundate recovering markets, it’s easy to feel like the underdog if your offer includes a pre-approval letter for a mortgage.
In some places — especially in the Midwest and Florida — more than half of sales in the first quarter of 2014 were closed with cash, according to a recent Zillow analysis.
“Cash is always the deal-sealer and the best way to get deals,” said Joe Spake, a longtime real estate agent in Memphis, where nearly half of first-quarter sales were all-cash. “Just, not a whole lot of people have it, especially in the regular-people realm. The average working person is going to have to get a mortgage.”
Across the country, cash buyers are on the decline, but in some markets you’re still very likely to be pitted against one. We asked agents in the country’s most cash-rich markets for advice for buyers who want to stay competitive without cash.
The bottom line is the bottom line
Cash buyers come in looking for a deep discount, said Tony Baroni, an agent in Tampa, which trails only Miami in the percentage of homes purchased with cash.
“At the end of the day, all the seller cares about is how much money they’ll get,” Baroni said. “Some sellers don’t care if it’s cash or financed.”
Tucson agent Spirit Messingham has seen buyers get intimidated when they go up against all-cash offers.
“What I tell people … is that most sellers don’t care if I give them a bag of dirty old cash or if I give them a loan from a local lender,” he said.