iOn REAL ESTATE | by Michael Humphries | Compass Roads Realty, Inc
The real estate market has become a competitive arena for homebuyers. Many are getting beat out by international buyers investing in U.S. markets.
In a report released earlier this week, the National Association of Realtors (NAR) found foreign purchases of U.S. real estate surged in the 12 months ending in March to $92.2 billion, an increase of 35 percent over the prior period.
An increasing number of purchases are coming from Chinese buyers—From April 2013 through March 2014, Chinese buyers accounted for 16 percent of foreign home sales, up from 12 percent in 2013 and just 5 percent in 2009.
Although these foreign buyers have played a much needed role in the U.S. housing recovery, they can be very difficult to compete with. 60% of international transactions this year have been cash as compared to only one-third domestic purchases.
If you're going go toe-to-toe with these guys you need to take measures into your own hands.
Cash buyers can be tough competition when you’re trying to buy a house however that doesn’t mean you’re out of the running on your dream home. Here are a 3 tips when going up against cash buyers:
- Accentuate your financial strength: With a good credit score, 10%-20% down payment and steady job, any seller would be happy to choose you. Have a pre-qualification letter from a reputable lender on hand ready to submit with your offer. Savvy buyers are also including a self-introductory letter making their offer more personal than business.
- Leave out any inconsequential contingencies: Some contingencies could complicate the deal for the seller and cause them to overlook your offer. Keep the offer as simple as possible. If it's not a deal breaker for you , leave it out. Most sellers choose cash buyers because they believe it’s less complicated.
- Be flexible with terms: The terms of the contract—closing date, inspection period, repair costs, etc.—can sway the seller in your favor. Discover the needs of the seller and give them what they want. If you and your agent can understand the driving force behind the seller then you should be able to accommodate and win against any other buyer-cash or not.
Michael Humphries, designated broker for Compass Roads Realty, Inc. and writer for iOn real estate covers local and national real estate news, industry trends and market analytics. Read more of his work here.
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