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Yes, You Can Compete With All-Cash Buyers—Here’s How

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To some of us, all-cash buyers are the scourge of the superhot housing market: They swoop in, supervillain-like, and snatch up the most beloved and valuable properties from under our noses.

Or at least the ones you might have loved, had you not been stuck with that pesky mortgage contingency.

Competing with cash buyers isn’t impossible, just difficult.

Sure, some sellers will take the major moolah every single time and there’s nothing you can do about it. But if you go in with a strategy, you might just have a shot. Here’s how to create one.

1. Figure out the seller’s goals

Determining what’s most important to your seller can be key to getting your dream home—even when you’re competing against an all-cash buyer.

“People often think that all sellers want the most aggressive, quick close, for the highest price. That’s not always the case,” says Shashank Shekhar, founder and CEO of Arcus Lending in San Jose, CA. When he sold his home earlier this year, the most important factor was getting back two months’ free rent, because he was also trying to buy.

“Even if the price was slightly lower but came with that offer, we would have taken that over all-cash,” Shekhar says. “Understanding what the seller needs is always the most important thing.”

2. Consider your contingencies

If you’re willing to forgo a home inspection or secondary appraisal, you may have a leg up over buyers who won’t.

“If you’re going to compete with a cash buyer, the contingencies may be a concern for a seller,” says Joe Petrowsky, a mortgage broker in Manchester, CT. “If the prospective buyer is willing to eliminate the contingencies, that may be an incentive for a seller, especially if there are some issues with the property.”

This isn’t necessarily the best strategy. Without a home inspection, for instance, the property could have crippling issues that might have precluded you from purchasing, had you known. But if you’re dead-set on this exact house and you’re pitted head to head against a cash buyer, it might be an option to consider.

Of course, there’s one contingency you can’t remove: the mortgage. (Hey, if you could, you wouldn’t be reading this right now!)

3. Get pre-approved…

You can help soften your mortgage contingency by getting pre-approved—and offering a strong pre-qualification letter from your lender. If you’ve saved up a significant down payment and have excellent credit, this might be your winning strategy.

“The seller or their agent should understand there really isn’t a chance the loan will not go forward,” says Petrowsky. With great financials and a large down payment, your mortgage officer can go to bat for you with the sellers, promising nothing serious will happen in the delicate time between offer and closure to compromise their money.

“Make your offer as cashlike as possible,” Shekhar says. “The No. 1 reason transactions fall through is because the loan gets declined during escrow.”

4. … but make sure your mortgage broker is great

“I see pre-qualifications all the time that are not worth the paper they’re written on, because the broker doesn’t know—or hasn’t done—the due diligence on the prospective buyer,” Petrowsky says.

How can you make sure your broker is worth his salt? Both Petrowsky and Shekhar recommend researching online beforehand, keeping an eye out for any negative reviews indicating mortgages that fell through at the last minute.

You’re looking for someone who’s thorough: “We do a lot of due diligence to make damn sure that person is going to get a loan,” says Petrowsky.

After all, sellers often go with all-cash “because they don’t want to get in any hassles during the loan process,” says Shekhar. “Give them that comfort, that safety.”

Keep reading.

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Apartment Development is the Reason Behind Twin Cities' Low Inflation Says Bloomberg

 
 

Compared to other regions in the U.S., the Twin Cities has a pretty low inflation rate.

In May, it became the first metropolitan area to see annual inflation drop below the Federal Reserve’s goal of 2%— at 1.8%. According to Bloomberg’s report on Wednesday, we can thank the boom of apartment construction for that feat.

That argument is similarly in line with a Wall Street Journal report last spring that explored how housing costs largely drive regional inflation. Minneapolis residents spend about 40% of their income on rent, Bloomberg reports, compared to nearly 50% or 60% in places like Chicago or Boston.

Wells Fargo also recently talked about how they see inflation cooling in the months ahead due to a possible decrease in the cost of rent.

“Our baseline forecast suggests year-over-year shelter inflation will continue to slow through late 2024 and may even turn negative by mid-2024,” San Francisco Fed economists Augustus Kmetz, Schuyler Louie and John Mondragon wrote in a report. “This would represent a sharp turnaround in shelter inflation, with important implications for the behavior of overall inflation.”

In Bloomberg’s report, it mentions Minneapolis’ elimination of single-family zoning and $320 million investment in rental assistance and subsidies since 2018, leading to a boom in multi-unit construction.

Minneapolis Mayor Jacob Frey told Bloomberg that instead of gentrification or rents skyrocketing after the increase in new buildings, the “exact opposite happened.”

Since 2017, the cost of rent throughout the US has risen 31%, according to the Pew Charitable Trusts, but in Minneapolis it has only been 1%. Frey has also been an opponent of rent control ordinances so far, which was recently passed in St. Paul in 2021 to cap rent increases at 3%.

“There is no more effective way to rein in inflation than to expand the supply of affordable housing and increase housing affordability,” Moody’s Analytics chief economist Mark Zandi told Bloomberg.

Read more on Minneapolis St. Paul Business Journal

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As Featured in West + Main Home Magazine: From Inspiration to Renovation

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Katy McEntire W+M Agent

“Updating our bathroom had been a dream ever since we bought our house"!”

 

“We had prioritized other areas of our home first, and it had taken a while for us to finally embark on this project. We knew that it would require professional help, as it was beyond our DIY expertise. With careful planning, design inspiration from online platforms, and the assistance of skilled contractors, we were able to transform our bathroom into a space that exuded lightness, airiness, and timeless elegance!"

 

Katy's design process began with gathering inspiration from various sources. "We saved countless photos on Pinterest and Instagram, collecting ideas for color schemes, tile patterns, cabinetry, and lighting," she said. "Our vision was to create a bathroom that felt light and airy, while also being classic in design. One of the challenges we faced was the vaulted ceiling in the bathroom, which required careful consideration when determining where to start and stop the wall tile. Once we had figured out the tile and shower configuration, the rest of the design fell into place." With a clear design plan in mind, Katy hired professionals to bring the vision to life.”

 

"We opted to hire out all the work, including demo, tile installation, plumbing, electrical, and cabinetry," she explained.  "The labor costs added up, but we were willing to invest in skilled labor to ensure a high-quality result. Our budget included expenses such as new cabinetry, shower glass, countertops, plumbing fixtures, lighting, and more. We were meticulous in sourcing materials that aligned with our design vision, from the Riad White Ceramic wall tile to the Emser Sterlina White Porcelain floor tile and the Luce Lazula Quartz countertops."

 
 
 

Along the way, the team encountered unexpected challenges, such as a color variance issue with the mosaic penny tile in the shower. Despite checking the dye lot numbers before purchasing, they faced differences in dye colors once the tile was grouted. However, they were able to resolve the issue by submitting a claim with the supplier, Floor and Decor, and they covered the cost of labor and replacement tile. It was a valuable lesson to always double-check and communicate with suppliers to avoid surprises during the renovation process!

 
 

"In the end, our bathroom transformation was worth the investment of time, effort, and budget," said Katy. "It was a significant upgrade from what we had before, and the overall design and finishes created a space that felt fresh, inviting, and timeless. Looking back, we learned that thorough research, clear communication with contractors, and staying organized were essential for a successful renovation project. We are thrilled with the final result and proud to have turned our bathroom inspiration into a reality with the help of skilled professionals."

 

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4 Major No-Nos a Mortgage Lender Says to Avoid When Moving to a New State

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Securing a mortgage can be a tricky process.

Between getting your finances in order and learning the lingo (APR, debt-to-income ratio, and LTV are just a few of the fun new terms), many people can be left feeling like their head is spinning. Add an out-of-state move to the mix, and things can become downright complicated. Ahead, loan originator Carrie Casey with Appli Home Loans shares what you need to avoid when your hunt for a new home is taking you out of state. 

Failing to Clear the Move with Your Boss

Having the ability to repay your mortgage is a major part of your loan approval, which is why Casey says you need to ensure you’ve got all of your ducks in a row with work before you make your move. 

“If you are a remote employee and are staying with your same employer in your location and purchasing a home, you will need a letter from your employer that you will be able to continue your remote job in your new location,” she explains, adding that some employers require their remote employees to remain within the state. 

Altering Your Existing Debt Profile

Another potential pitfall Casey says you need to avoid has to do with changing your existing debts. “Hold off until buying a new vehicle or selling a vehicle (selling will close that line of credit and impact your credit score negatively at least for the next month or two), avoid switching banks, don’t spend all your money you’ve set aside for your down payment and closing costs, and please don’t lie about having a job in the new location,” she continues. “We always verify!”

Trying to Hide Recent Spending

Casey knows that things can come up, which is why she says it’s important to keep an open line of communication with your lender. “If you’ve bought anything on your credit cards outside of the ordinary usage, let your lender know right away so they can determine if there’s an issue,” she says. “I once had a client book a trip to Thailand during the process and it dropped her credit score 30 points and caused her mortgage insurance rate to increase about $80 per month.”

Fortunately that borrower had a credit score in the 800s, which allowed her to take the hit to her credit. But not everyone will be that lucky. “If credit had been in the 600s it could’ve been a lot worse and it could knock someone out of qualifying.”

Putting Your Moving Expenses on Plastic

Long-distance moves can wreak havoc on your budget, as they tend to be more expensive than local ones. Some people may be tempted to put those initial fees and charges on their credit cards to help offset the costs, but Casey says that can spell trouble for your application — even if you plan to pay them off right away. 

“The charges affect your credit immediately, but the credit bureaus can take a month to reflect after paying the credit cards back down,” she explains. “If there is a major credit issue while under contract on a home, there is something called a ‘rapid rescore.’ It involves following a set of instructions to get credit back in line by paying down specific lines of credit, but it can be costly and difficult to do if you don’t have the funds.”

If you have the funds in your bank account, Casey says that she recommends going that route rather than putting anything on credit. And when in doubt, talk it out! Your lender should be able to answer any questions you may have, so give them a call before making any changes before your loan closes.

Get more like this on Apartment Therapy.

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The Perfect Backyard Additions for Late Summer and Early Fall

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As the summer fades out and the fall season approaches, many homeowners look to spruce up their outdoor living spaces.

]You can make many backyard modifications to create a unique setting for your family and friends to enjoy. Whether you’re adding an outdoor kitchen, a fire pit, or a pool, there are countless ways to create the perfect space for your late summer and early fall gatherings. This blog post will explore some of the best backyard additions to consider.

Outdoor Kitchen
Investing in an outdoor kitchen can enhance the functionality and aesthetic of your backyard. It offers a perfect space for entertaining guests while adding value to your property. Whether it's a simple grill station or a fully equipped cooking area with refrigeration, a range, and a sink, an outdoor kitchen can be customized to meet your specific needs and budget. You may consider incorporating additional features such as a bar area, a pergola, or even a beautiful stone wall to create an inviting atmosphere. Maximizing your outdoor living space with an outdoor kitchen can provide an ideal environment for cooking meals, spending time with loved ones, and making memories.

Fire Pit
A fire pit can truly enhance any backyard during the fall season. As the temperatures drop, a fire pit can provide a much-needed source of warmth on a cool evening. However, a fire pit's benefits don't just stop at its functional aspects; it's an excellent way to add ambiance and atmosphere to the outdoor space. When it comes to designs, homeowners have an array of options to choose from when picking their perfect fire pit, from the basic wood-burning pit to the advanced gas-powered fire pit. Fire pits come in diverse shapes and sizes, so homeowners can find one that fits their unique style and taste. Whether you opt for a round or square, low or high fire pit, one thing is certain: it's a fantastic investment to enjoy the outdoors even as the weather gets chilly.

Swimming Pool
A swimming pool can be a valuable addition to your home's backyard, particularly during the summertime when the heat seems to be inescapable. Choosing the right pool for your backyard can be challenging, but with some considerations, it doesn't have to be. While various in-ground and above-ground pool types are available, it's essential to consider your available backyard space and budget while making this decision. Additionally, adding beautiful pool decks and surrounding landscaping can elevate the pool's appeal, making it a refreshing retreat and a statement piece in your backyard. A swimming pool can be an enjoyable investment that adds value to your home and helps you beat the heat during the summer months.

Outdoor Lighting
Outdoor lighting is a necessary aspect of any backyard space. It not only adds to the ambiance but also helps people navigate safely during the nighttime hours. There are plenty of lighting options available in the market for those interested in adding outdoor lighting to their yard. Whether it is string lights or lanterns, the availability of different options means that homeowners can choose the style that best suits their preferences and budget. Furthermore, considering LED lights for outdoor lighting is highly recommended as they are more energy-efficient and have a long lifespan compared to traditional bulbs. Making the wise choice of LED lighting can lead to an enjoyable outdoor experience for years to come.

Garden
A garden is a wonderful way to create an inviting and peaceful space in your backyard. By carefully selecting plants and flowers that are well-suited to your yard's landscaping and climate, you can quickly transform your outdoor area into a serene oasis. Whether you want to relax with a good book or simply enjoy the view, a garden provides the perfect setting. For those seeking an even greater sense of tranquility, consider adding a small pond or fountain to your garden- the soothing sounds of water can work wonders to create a calming atmosphere.

Hot Tub
A hot tub is a luxurious addition to any backyard, offering more than just a source of entertainment. With proven health benefits, including relaxation and improved circulation, it's no wonder that hot tubs continue to be a popular investment. Whether you're inviting guests over or looking for a relaxing evening with family, a hot tub provides the perfect setting. When selecting a hot tub, it's important to choose from a trusted company like Wellis Hot Tubs of Colorado. Choosing a reputable manufacturer ensures the long-term performance and safety of your investment, giving you peace of mind for years to come.

There are many backyard additions that you can consider to make your outdoor living space more fun and inviting. From an outdoor kitchen to a hot tub, these additions will bring joy and comfort to the entire family throughout late summer and early fall. Take some time to research what works best for your backyard, budget, climate, and lifestyle before making a decision.

Get more tips on RISMedia.

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