How to Compete with Cash Buyers in the Colorado Real Estate MarketPosted on Mar 08, 2018
An experienced real estate agent gives you an edge when you are not sure how to make an offer on a home in Colorado in a sea of cash buyers. According to a recent article by housingwire.com, it's more challenging to win a loan-backed bid in the competitive environment such as the Colorado real estate market. Many potential buyers in Castle Rock, Westminster or the surrounding areas fall in love with their perfect home. Finding a home within budget, a great Colorado neighborhood that is close to school and work is exciting. But it's heartbreaking to hear bad news: the seller accepted a cash offer. To compete in the loan-versus-cash bid situation, it's not enough to receive the pre-approval from a mortgage lender. A good real estate agent knows how to handle a bidding war.
Working with a good lender
Just as it's important to line up a good real estate agent, it's also good to work closely with a reputable lender. Make sure your lender knows your timeline. Keep your lender and agent's numbers on speed dial. Ask your lender to call the seller's agent after bid submission to answer any questions.
Getting fully approved in advance
Don't make the mistake of thinking it's enough to have a pre-qualification letter from a lender. Complete the entire process, which includes a credit report, employment check, tax returns and other paperwork. Make sure the loan is approve contingent on the appraised home value.
Writing a heartfelt letter
Some people write a personal letter to the seller expressing a deep interest in the home. Compared to a cold cash offer, a personal plea could affect an ordinary home seller who is not an investor. Ask your real estate agent to check the letter before submitting it with a bid. In some cases, a particular seller might feel offended or taken back by a personal letter. It's always best to let your real estate agent feel out the situation.
Other tips for making an offer on a home in Colorado include completing a clean, complete contract with no missing information, dates or numbers. If possible, offer a price higher than listing price to compete with cash bids. Oftentimes, a few more thousand dollars is enough to swing a seller leaning toward a cash offer. At Team Lassen, we help home buyers through the buying process. For more advice on how to present an offer on a home, please contact us.