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5 Ways to Help Your Clients Compete With Cash Buyers

These tips(summarized) will help your buyers’ offers seem more attractive; originally by Jackson Cooper November 12, 2015.

Key takeaways:

  •  The cash market has been falling since January 2013. However, with cash buyers making up a little more than 30 percent of the market, your clients are going to need every competitive edge they can find.
  • The FICO score is calculated by analyzing all open accounts on a person’s credit report. One of the first things you need to be aware of is making sure clients are well below their credit limits and consistently make larger than the minimum monthly payment.
  • With the seller, and possibly the listing agent, a larger earnest money deposit can go a long way toward greasing the wheels.
  • Even though the cash real estate market is slowing, it’s still important for you to help your buyers who need to compete with cash buyers.

home buyersIn February, CoreLogic data showed 37.9 percent of closed deals were to cash buyers, which is down from 40.6 percent the previous February. In February, Core Logic data showed 37.9 percent of closed deals were to cash buyers. For buyers who plan to finance, this is excellent news. The cash market has been falling since January 2013. However, with cash buyers making up a little more than 30 percent of the market, your clients are going to need every competitive edge they can find.  Below are 5 ways to help your clients compete with cash buyers.

These five tips will help you help them beat the lure of cash.

  1. Understand creditworthiness
    For 2014, Ellie Mae statistics show 67% of buyers who financed had scores of 700 or greater. Paying off and closing accounts will not boost credit scores. Pay them off, but leave them open.
  2. Convincing a client time is on his or her side
    Pre-approval letters offer the seller security. They also reduce the amount of time to fund the loan. Part of what makes cash buyers so attractive is the instant gratification aspect.
  3. Waiving contingency clauses
    To compete with cash, your clients need to keep the contract as unencumbered as possible. About funding options: To attract buyers, the FHA accepts lower credit scores and smaller down payments, but to finance a home with an FHA loan, the home needs to be in near-pristine condition to pass inspection. So if clients need to finance, a conventional loan will make them a more attractive buyer.
  4. Extra earnest money
    With the seller, and possibly the listing agent, a larger earnest money deposit can go a long way toward greasing the wheels. This is a great option if the buyer is a solid qualifier for securing the mortgage on the property.
  5. Making an emotional appeal
    Selling a home is an emotional experience. Ask clients to write a note expressing love for the home. A genuine expression of what being the owner of the property would mean.

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