Cash is King and Why the Highest Bidder Does Not Always Win
In all transactions cash is always king! That is especially true when buying high-ticket items like a house or a property. Because believe it or not, when buying a house, the one with the most money will not always win against the one with the most cash on hand.
When bidding for a property or a house, offering the highest bid does not guarantee a sure win. Any real estate broker will tell you that while a seller might be tempted with the highest number on the table, there are other factors that can close a deal.
Here are four important tips to make sure that you win against a higher bidder.
1. Cash is king
Like stated above, a cash sale will always prevail over a “promised” offer. Like when you are 1111bidding for that old ’67 GTO. One buyer offers $65,000 for the car but will need three days or one week to deliver the green bucks. Then you come with cold cash and offers to pay $60,000 on the spot. With a blink of an eye you are clearly the winner and will drive home that car. The same is true when buying properties. Since the start of 2014, 43 percent of home sales are all-cash transactions, data from RealtyTrac showed.
Sellers prefer cash deals because there is less issue on mortgages and lenders, plus the escrow closes much faster and sellers do not have to worry about appraisal.
Yeah, a letter from you telling the seller that you want to buy the property because you picture yourself raising your family there and promising to take care of the house really helps. Indeed, there are home sellers who claimed to have sold their properties to someone who have offered less money just because the buyers wrote them letters. Apparently, those letters made huge impact on the sellers and they were willing to sell their properties at a much lower price even though the one who did not wrote a letter offered a higher bid. Although writing letters does guarantee you sealing the deal, but it will surely help you.
3. Be easy to deal with
Of course as a home buyer, you want your property and the transaction to sail smoothly without all the hassles. Well, good news is, you and the seller are on the same page here. Buying a property requires some requisites, like inspections, financing, appraisal and other contingencies. It is advised that you go easy on these contingencies to make the impression that you are easy to deal with. Adding too much contingency might weaken your offer. Make sure that the contingencies you require are necessary before making an offer.
4. Have a pre-approved letter
If you don’t carry that much cash with you, meet the seller with a pre-approved letter confirming that your mortgage broker or bank is guaranteeing you are ready to buy the property at a set price range and that your loan is already pre-approved. That will surely catch the attention of the seller as you actually carry with you a virtual cash. While another buyer might offer more than you do, having a pre-approved loan will make the transaction easier to seal between you and the seller.
When looking for a property, it is best that you use the available technology that will make it easier for you to do your search.
Among the notable companies that had successfully married real estate and technology is RealBiz Media Group (OTC: RBIZ), which caters to 60,000 real estate agents and brokers. Through its proprietary video processing technology, it is able to create virtual tours for prospective buyers.
The video tours allow customers to get an accurate representation of the property, saving them time and money instead of traveling to the location.
The company recently launched its Nestbuilder Agent and MVA video platforms which is not being used by more than 15,000 agents. More than 24,000 videos are being published daily through its video based marketing platform. Meanwhile, virtual tours have resulted in 113,092 published listings.
RealBiz Media also has a consumer site called Nestbuilder.com, which hosts 1.6 million videos and has increased it page views by 196% earlier this year.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.