How to be a Successful Buyer




We’ve never seen soooo many cash offers, and sellers will pick cash over any other offer, unless they really are confident in the terms of a mortgage and it’s a great local lender.  Here’s where buyers are finding their cash:


  • Parent or relative – loans buyer the money, buyer refi’s home after closing, pays cash back.
  • Borrows from retirement fund
  • Works with a lender who has a “Cash is King” program, buyer provides all tax information, paycheck stubs and other needed documents for a solid preapproval, home closes with cash, then that lender converts to a loan after closing. There is a 1-2% fee for this, and buyer pays closing costs for both transactions, but usually pays less overall as they don’t have to escalate as much over list price with a cash offer.


TIP #2

Here’s the pecking order in which sellers will evaluate offers:

  • Cash usually trumps all
  • Conventional Loan with 20% down payment or higher
  • Conventional Loan with lesser down payment
  • FHA, VA or USDA loans:
    • The reason sellers tend to shy away from these loans is that they require a more extensive appraisal (note: this is an APPRAISAL, not an INSPECTION), so sellers are worried about having to make repairs which lowers their net proceeds.
    • These loans can take 6 weeks to close, much longer than cash or conventional loans.


**Loan Tip – work with a good LOCAL lender who is known to be able to close deals on time. We can provide you many great lenders we work with. Offers with preapprovals from Rocket Mortgage, Quicken Loans, USAA, Navy Federal Credit Union or other online lenders will get your offer pushed to the rear of the pack.


TIP #3


  • Pay your own closing costs, we are not seeing many offers being accepted where sellers are asked to pay closing costs. If it is essential, please plan to add the closing costs on top of your offer amount.
  • Offer the seller a flexible closing date.
  • While we never discourage inspections, try to communicate to the seller that you will only ask for repairs up to a certain amount, or you are only looking for major issues that are not visible when looking at the home., or inspection is “for buyer information only”. After the inspections you can cancel the contract if something is found that is a dealbreaker but know that the seller also knows that as well.
  • Don’t ask the sellers to provide a home warranty, that’s something you can purchase later on your own if you want one.
  • Don’t ask sellers to mitigate radon, something you can do on your own if radon is a concern for you. Radon testing for a real estate transaction is more expensive than the test you can do after you own the house.
  • Don’t ask for any personal property other that what the seller is offering to leave. For example, if you see a riding mower in the garage and seller has not offered to include with the sale, don’t ask for it!
  • NO LOVE LETTERS! A love letter is where you write a letter to the sellers on what you love about the house and why it is perfect for you. These are HIGHLY discouraged and can be Fair Housing Violations. We will include a cover letter with your offer when we send it over.
  • Don’t escalate over the purchase price unless you are comfortable paying any appraisal “gap” in cash to the seller on closing day. We are seeing appraisals coming in at the higher amounts, but a seller isn’t going to accept an offer without reassurance that your offer is the amount they will get at closing.


Donna Arnold Homes    Keller Williams Legacy Group   563-505-2258