If you own a home, you are probably very familiar with mortgages. If you’ve not purchased a home recently, you may not be aware of how many cash buyers have flooded the market over the last few years.
In the red-hot market of 2021 and 2022, buyers were pushing up come prices by putting in bids over asking price and making cash offers.
This shift changed expectations of homeowners who are now expecting to receive cash offers for their homes and homebuyers who are left to figure out how they can make a competitive cash offer.
Today, we’re going to break down the two choices you have with buying a home in this market: get pre-approved, or pay with cash. Let’s go over each option and why you might want to do one over the other.
Option 1: Get pre-approved.
If you’re financing your new home, getting a pre-approval letter from your lender is crucial. Freddie Mac tells us that “a pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. The lender you work with will provide you with a pre-approval letter, which is an official document that states the maximum amount they are willing to lend you, based on key criteria.” A pre-approval letter shows sellers that you’re a solid buyer.
This is really the bare minimum for starting your house search; without a pre-approval letter, sellers aren’t going to take you seriously.
Paul Centopani, Editor for the Mortgage Reports, explains: “most sellers won’t even consider an offer unless the buyer is pre-approved at the right price point. Sellers and their agents want to know you’re ready and able to finance your offer amount. So you’ll want to have your pre-approval teed up as soon as you’re serious about bidding on a home you like.”
As a bonus, a pre-approval can help you decide a price limit for your home search. If you start searching before getting a pre-approval, you may fall in love with a home you can’t afford. Most pre-approvals are valid for 90 days, so you may need to get a new letter if your home search goes longer than that.
Option 2: Pay with cash.
If you are able to buy a home with cash, then you don’t need a pre-approval. A cash buyer is a much stronger buyer than one who is financing; cash offers are four times more likely to win in a bidding war. Many sellers will actually choose a slightly lower cash offer over a higher financed offer. Having the ability to pay cash gives you huge benefits over financing.
Of course, most people don’t have hundreds of thousands of dollars lying around. It’s easy to assume that making a cash offer is out of reach. If you have a home to sell, though, you can get cash for your dream home—even if your current home is distressed.
When you sell to MarketPro Homebuyers, we’ll give you cash for your home as-is, no matter the condition. We’ll help you avoid repairs, commission, fees, and closing costs to maximize your profit from the sale of your home. This can help you get set up to make a cash offer on your dream home.
This may seem too good to be true; but when we say as-is, we really mean it. People ask us:
Will you buy my property if it needs new appliances?
Will you buy my property if the sinks leak?
Will you buy my property if I need a new roof?
The answer to all of these is—yes!
We’ll give you a fast cash offer for your current home just as it is now; no repairs, no upgrades, no inspection, no commissions or fees. You can even choose your exact closing date to coordinate perfectly with the purchase of your new home. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
You’ll get the cash you need to make your very own cash offer on a new home.
If you’re in Washington, D.C., Maryland, Virginia, or Pennsylvania, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.