Minneapolis and St. Paul Duplex Real Estate
In a Star Tribune article by Jim Buchta, it was noted that Realty Trac said that cash buyers received a nearly 10 percent discount from the average market value during the third quarter. Cash buyers represented nearly 55% of foreclosures and short sale purchases. 22% of all sales in Minnesota last quarter were cash sales. Further 64% of all properties under $100k were cash transactions.Often, buyers that think they are in a great position to get a property under contract, get blind-sided by another buyer that comes in with a cash offer. Here is some advice to potentially beat a cash offer when you are in a multiple offer situation.
1. Make your best offer up-front.
As a buyer, you need to look at the property and your personal situation and make a determination of how bad you want the property. You also need to look at the situation and compare it to the other properties that you have seen. If this is the property you really want, it may be time to offer above the asking price.*Keep in mind for each $1000 more you pay for a property your mortgage will increase by approx. $4 per month. If you offer $10,000 more for a property you will pay $40 more per month.
2. You can make your earnest money non-refundable.
The big fear for sellers, whether they are a live person or a bank, is that the buyer that makes an offer that requires financing will owe the seller nothing if they don’t get the loan. In an example, a buyer could offer $5000 in earnest money and make it non-refundable after they conduct their inspection. It is a major risk, however it may be a good move to secure a property.
3. One other move is to not conduct an inspection.
In a multiple offer situation, you can often get contractors or inspectors into the property prior to having your offer considered. Once again, you are creating a more risky situation, however it may be the best way to lock-up a deal.If you have cash, or access to it, you will be seen as a better option by most sellers. If not, you may need to up your game.