Cash is increasingly king when it comes to buying a home. However, not everyone has the cash upfront for such a large purchase. Even so, non-cash buyers still have a chance of winning the keys to their castle with a few expert tips.
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First, the facts: all-cash purchases for residential properties in the U.S. were 40% of sales in July, according to real estate data supplier RealtyTrac. That’s up from 35% of sales in June and 31% of all sales in July last year.
In the above episode of Destination Home, Noah Rosenblatt — founder of New York analytics and consulting firm UrbanDigs — talks about why cash purchases have risen and what potential non-cash homebuyers can do to compete.
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While there’s no way to know exactly who is responsible for all of these cash deals — and we hear a lot about foreign investors driving this trend — Rosenblatt says, in fact, foreign purchases actually made a decline from last year.
More likely, Rosenblatt attributes the cash buying to a competitive environment driven by a limited inventory of properties. In other words, it’s a seller’s market and buyers are doing whatever they can to compete.
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So how do you compete with a cash buyer if you are looking to finance your home?
Check out the video for Rosenblatt’s tips, which include outbidding cash offers (see the interview to find out the magic percentage it could take to make a seller reconsider). Other tricks involve removing the financing contingency in the contract (which would essentially guarantee financing or you'll make up the difference), along with a few other concessions a non-cash buyer can offer to sweeten the deal.