Every homebuyer wants to get ahead of the competition. Of course, some buyers will be more favored by sellers because of their ability to pay cash upfront. If such an opportunity presents itself, it is highly likely the seller will go for it over other options. After all, the sale is much smoother and quicker this way. 

But those who want to purchase a house using a home loan should not worry because you can still compete with home cash buyers. Follow these strategies to sway the odds in your favor and beat those cash buyers. 

Get Ready to Bid Higher Than the Asking Price

Cash buyers usually have high expectations to get a discount on the asking price because they believe paying cash upfront is appealing to the seller. This hole in the home sale process can be filled by the credit buyer by bidding higher than the asking price. 

Just avoid going over your budget. Consider buying properties in the lower price range to make room for a higher offer. This situation will get you in equal standing with the cash buyer.  

Ensure the Seller That Your Offer is Secure

Home sellers know that financial difficulties usually derail the home sale process. The reason why they prefer cash offers is because they get more security that the sale will push through. 

As a buyer who uses a mortgage to purchase a home, you can show the seller that your offer is secure. For example, you can use a pre-approval letter from the lender showing you are well-qualified. If the pre-approval indicates a higher amount, it makes your offer look stronger.

This evidence can help ease the concerns of the home seller and help him consider you a reliable and serious buyer. 

Beat Cash Buyers Using an Escalation Clause

You can opt for an escalation clause to compete in a bidding war for a real estate property. Talk with your agent to include this clause in the contract. Make sure to put an amount that is substantial enough to make the seller think you are a reliable buyer. This way, you can have a chance to go up against a cash buyer. 

Putting up a $1,000 for an escalation clause may be too weak an offer. Be prepared to go up to $10,000. This escalator can make the seller think you are willing to raise your offer up to that amount if a competing offer presents itself. 

Schedule a Home Inspection Right Away

Work with a home inspector whom you can call to see the property and complete the inspection early. This creates an impression on the seller that you are serious about buying the home. Scheduling a home inspection right away helps you on par with cash buyers. 

Moreover, you can waive the home inspection altogether if you see the house is new and in excellent condition. Many buyers are ready to waive the property inspection, particularly in a hot housing market. Sellers, on the other hand, want a quick home sale process. So, forgoing the home inspection can give you an advantage as a homebuyer. 

Allow the Seller to Choose His Preferred Closing Date

The closing date is a crucial matter in a home sale process, particularly on the part of the seller. Make sure you are flexible with the seller’s preferred closing date to strengthen your position against cash buyers. 

You should agree with the seller regarding his desired closing date. Remember you are at a disadvantage already against cash buyers. But fulfilling the seller’s needs can help reverse that situation. 

Make a Part of Your Earnest Money Deposit Non-Refundable

You can increase your chances of beating a cash buyer if you make a part of your earnest money deposit non-refundable. However, you have to determine how much money you are willing to risk. The seller will feel at an advantage if he knows he can gain a portion of the escrow funds. 

Give Some Personal Touch in Your Offer

You can divulge your plans about the property to the seller to make your offer more personal. You can do this through a personalized letter or email. While it may not be effective all the time, some sellers may accept your offer if you add a personal touch to it and you are sincere with your plans regarding the property. 

Final Thoughts

Do not lose hope if you are competing with cash buyers. There are various strategies to beat them for the house you want to purchase. You can bid higher than the asking price or show the seller that your offer is secure. You can also use an escalation clause or schedule a home inspection immediately to tell the buyer you are a serious buyer. There are many ways to compete with cash buyers.