Cash Is King? Not So Fast: 7 Home Buying Secrets To Help Beat Cash Offers

NATOMAS (CBS13) — With people priced out of the Bay Area, they are finding cheaper options up and down the Sacramento and San Joaquin valleys. Some willing to commute are showing up with cash and it's keeping locals from landing homes.

Angela and Bryan Morgan of Natomas got used to rejection.

"We got beat out 3 times," Bryan says.

He is a veteran and the couple was looking in the Natomas Park neighborhood and planning to finance a home with a VA loan.

"And we'd get excited and make an offer, and it was not accepted," Angela said. "To find out it was a cash offer; it was discouraging."

Can you beat cash? Realtor Cynthia Hextell says yes.

"It used to be cash is king. I don't think that's necessarily true anymore," she said.

SECRETS TO BEATING A CASH OFFER

1. PUT DOWN A BIG DEPOSIT
She says putting down a big deposit shows you are serious on wanting a house.

2. HAVE A LOAN LINED UP
When it comes to making on offer on a home against a cash offer, a pre-qualified loan isn't enough. Hextell recommends being pre-approved to show your offer is serious.

3. OFFER TO CLOSE FAST
Typically it takes 30 days to close a home sale. Hextell says offering to close in 17-21 days is attractive to sellers.

Rene Jacques with Golden Bay Mortgage group says his quickest close this year was 13 days, and they average 21 to 22 days.

4. FIND LENDER THAT WILL UNDERWRITE LOAN BEFORE OFFER

Jacques also says you should work with one of the handful of lenders willing to start underwriting a loan, with an address to-be-determined. A good broker can find these lenders.

"A lot of banks won't even look at a file unless you have a contract or a property it's attached to," Jacques said. "So the few that do allow you to go through that process; that's gold in your hand."

5. WORK WITH NEIGHBORHOOD-SPECIFIC REALTOR

Hextell says working with a Realtor who has a good reputation in specific neighborhoods could give you the upper hand. That connection could help convince the seller and their agent to go with your offer because they know the deal will close.

6. WAIVE CONTINGENCIES

She also suggests waiving contingencies if it's a newer house. This contingency period allows you to back out if something negative pops up in various inspection reports. Keep in mind, you may need money stashed away to make repairs if your lender requires the fixes before funding your loan. Consider having a trusted contractor friend check out a home before you make that offer.

7. SELL THEM ON THE NEW HOMEOWNERS

Angela and Bryan included a two-page letter to the seller with their offer and photo of their entire family.

"We pulled at the heartstrings I think," Angela said.

Following all of this advice worked. The couple beat out a cash offer on their Natomas Park home.

"It was a dream true really," Bryan said.

"We're happy here and we love the house," Angela told Kurtis. "This is where we wanted to be."