In Competitive Markets, Cash Offers Give Buyers the Best Chance
Fortunately, there are options for the less bankable as well.
(Mountain Lakes, NJ, March 29, 2018) — Get ready for even more bidding wars: As the U.S. real estate market enters its spring buying season, the supply-and-demand equation is characterized by tight supply (rock-bottom inventories) and strong demand (in the form of robust job growth).
Those ingredients combine to nearly guarantee that many bidders will lose out on homes.
But there are some tactics that can raise a buyer’s odds of landing a property, according to an analysis by Redfin.
Alas, the most effective strategies require deep pockets. Redfin finds that all-cash offers are by far the best way to win a bidding war.
An all-cash offer boosts a competitive bidder’s chances of success by 97 percent, essentially doubling the likelihood that the seller accepts the offer, Redfin says. In the luxury market, the results are even more dramatic — a cash offer improves the bidder’s chances by 438 percent, a five-fold increase.
And while the all-cash offer is the purview of only the fortunate few, there are other options:
Waiving the financing contingency increases the buyer’s chance of success by 58 percent. While a love-letter — a personal plea from bidder to seller — increases an offer’s chances of success by 52 percent, Redfin says.
More from Redfin appears in the April issue of Real Estate Broker’s Insider along with details on the ongoing commission squeeze, an interview with Broker John Collopy, and more.
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