Buyer uses one of my favorite strategies to beat out an all cash buyer. This summer has been a robust seller’s market with first time buyers being all cash buyers in many cases.
This makes it hard to look like an attractive, safe buyer with one’s $20k for a down when someone else shows $500,000 in cash. So, how can a buyer win against such odds? I have used this trick several times and it worked again this time: the buyer offered to pay up to $10k in cash if the appraisal does not come in at the bidding-war inflated price.
How can he do that? He had planned on putting 5% down, so instead we did it for 3% down and a NO COST loan, leaving the extra 10-15k he saves available to make up the difference. You are probably wondering if this is a good deal for him: well, with 3-10 offers going in on every property for the last 3 months, and prices having increased 5% in the last 6 months, he can either come in at a strong bid or wait.
The only thing to slow down the market would be rising rates, or Santa Claus, and he does not want to wait that long and miss out on the benefits of homeownership…