Buying a House with Cash: A Guide
Kelly K. | Aug 27, 2021
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By Kelly K. on Aug 4, 2021
As a homebuyer in today’s hot real estate market, you’re facing some fierce competition. So, we don’t blame you for feeling a tad overwhelmed – or even discouraged – especially if you’ve lost a number of bids to all-cash buyers.
Wondering how you could possibly compete with an all-cash offer? The answer is simple: the secret to beating a cash offer and walking away with the keys to your dream home is to make a cash offer yourself.
You don’t need to have a net worth that rivals Jeff Bezos or Jonathan and Drew Scott from HGTV’s Property Brothers to be able to make a cash offer on a house.
Here’s how everyday buyers are doing it, too.
Compete with an all-cash offer by making one yourself
We know what you’re thinking: How can you compete with an all-cash offer if you don’t actually have the cash to do so?
Accept.inc is an iLender who makes it possible for regular people who qualify for a mortgage to make an all-cash offer even if they don't have hundreds of thousands of dollars lying around.
You can secure the funds by getting Cash Approved™ – which will provide you with the upfront liquidity needed to make an all-cash offer, backed by an Accept.inc mortgage. You’ll reap all the same benefits of a cash offer – like a competitive edge and a speedier close – but without the need for upfront liquidity.
Traditional mortgage lenders don’t initiate the underwriting process until a home is officially under contract. Through Accept.inc’s Cash-Approval process, however, underwriting is performed upfront. That means you’ll be fully mortgage-approved (really approved, not "pre-approved"!) before ever submitting an offer on a home AND you’ll have the strength of cash in your back pocket.
Similar to how a 0% credit card works, we front the funds for approved borrowers to make their own all-cash offer with no additional costs or hidden fees. This allows you and your real estate agent to shop the housing market and negotiate with sellers using the power of cash.
And when the deal is done, you pay back the borrowed funds over time just like you would with a traditional mortgage.
Have a knowledgeable real estate agent by your side
A licensed real estate professional serves as an advocate for your interests – working on your behalf to find you a dream home that fits both your budget and needs.
They’ll have invaluable knowledge about the local market, providing insights on neighborhoods and school districts while helping you understand any paperwork or confusing jargon that may sound like a foreign language to you. What’s more, you can lean on an agent’s expertise to write a competitive bid and negotiate with the seller.
Real estate agents understand what truly matters to today’s sellers. By understanding what motivates the seller, you can draft up an offer that caters to their specific needs. For example, maybe they’re looking for a quick and seamless transaction. Or, maybe they prefer to deal with as few contingencies as possible.
Know your numbers, so you can move fast
The perfect home has caught your eye -- it's everything you want and need. But before you break out the champagne, there's still a lot that needs to happen before you can win the bid.
You don't want to lose out on the perfect home because you were too slow to present your offer. In a hyper-competitive market, that means you have to know what you plan to offer as soon as possible, which means you've already done all your homework ahead of time.
Factors to consider: What's your budget? And how much do you need to bid to win?
In terms of affordability, a good rule of thumb is the 30% rule, which says you should spend 30% (or less) of your gross monthly income on house-related costs. But savvy home buyers know it’s important to crunch the numbers to know specifically how much your monthly costs will be and how that fits into your larger budget. (Here are some pro tips for calculating your total monthly housing costs.)
If you've been working closely with a real estate agent, you should already have a sense of whether homes in your market are selling below, at, or above listing price in your desired neighborhood. So work with your agent to come up with a good number, put in your offer quickly, and be sure to let the seller know you have cash on hand!
Get cash approved ahead of time
While traditional pre-approvals are quick to obtain, they don’t provide much certainty because the lender can still decide to deny the loan later in the process.
To give the home seller true confidence that your offer won't fall through due to financing issues, you’ll need to get fully underwritten upfront. That's what getting a mortgage through Accept.inc does. Taking the financing contingency out of the equation is one of the biggest differences between a Cash Approved™ buyer and one who is simply pre-approved.
Crafting a winning offer and boosting your confidence while house hunting ultimately boils down to being able to make the best offer, not necessarily the highest offer. Gain a competitive advantage in this seller's market by having full proof of funds in the bank and being able to move quickly, just like those other all-cash buyers who have been snapping up homes from under everyone's noses.
Get Cash Approved today and improve your chances of scoring your dream home by 4X.
Kelly K. | Aug 27, 2021
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