Competing With Cash Offers: Understanding Seller Motivations

As many in the real estate world are well aware, including real estate investors, the cash buyer has become a more and more common reality on the market today. The National Association of Realtors estimates that the percentage of cash offers has skyrocketed over the past year, with several factors contributing to this sea change, including an unusual year due to COVID-19 – but if you’re not a cash buyer, will you be able to compete with this new influx?

At Fox Financial, we’re here to help. Our real estate investment services are varied and comprehensive, assisting with everything from investment properties and passive real estate investing to several other types you may be interested in. Are you an investor who does not have the capability to make an all-cash offer, but is looking for ways to compete with these offers and even win out against them? This multi-part blog series will go over several basic themes and tips for competing with cash offers.

competing cash offers seller

Sellers and Motivations

The primary theme we’ll be hitting at in this series, from several different angles, is appealing to seller motivations – which are not always the same. While it’s absolutely true that most or all buyers are motivated by dollar figures to at least some degree, there are also several other factors that may play a role in what a seller is looking for.

And when you’re looking to compete with an all-cash offer that may be more attractive in some ways, a key approach is to identify the seller’s additional motivations. Our next several sections will go over the various different areas a seller might be interested in, plus how you can make offers that speak to these interests.

Moving Quickly

One of the most common motivators for sellers outside the dollars and cents in a home sale is the speed of the sale. Sellers may have several reasons for desiring a quick sale, whether it’s a move to a new city or a need for quick closing so they can buy into another investment opportunity elsewhere.

For these sellers, there are several ways to make your offer more attractive. Make your money easy to access, for one, and consider limiting the time periods in your offer for things like the appraisal, inspections and other tasks – these should still be done, yes, but you can shorten the time period to appeal to the seller.

Ability to Settle Reliably

In addition, sellers want a reliable buyer they are confident will be able to proceed through the settlement phase. This area involves presenting yourself as well as possible with your offer, including sharing prudent financials to give the seller a complete idea of your situation. For some investors, a partnership with another investor, particularly one with name value on the market, may help with impressions of reliability from the seller.

For more on how to compete with cash offers on the real estate market, or to learn about any of our real estate investment services, speak to the staff at Fox Financial today.

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