Updated: Jul 8
These are three strategies we’re using to help our non-cash buyers win.
In today's real estate market, how are you going to compete with a cash buyer? I think you need to understand some current data about our local real estate market for me to adequately answer that question and inform you of how you should compete with the cash buyer.
Right now, there are 523 single-family homes for sale in all of Salt Lake County. 1,521 single-family homes are under contract and 13,701 have sold in the past 12 months.
When economists look at this data, they run what's called an absorption period. If you do an absorption rate based on properties in escrow, that tells us that there is less than a two-week supply of housing in all of Salt Lake County.
Of those 523 homes, 422 are under $1 million, and 101 of them are over $1 million. I don't have data on this, but based on that absorption, I would tell you there are probably about 10,000 live buyers competing for those 523 houses.
We educate you so you can make an educated decision.
So how do you compete with some of those 10,000 buyers who are making cash offers? Here are a few quick tips and options on what we've been doing for our clients who aren't paying cash to win the bid in a multiple-offer situation.
1. Earnest money. It's not just about the amount of earnest money anymore; it's about how quickly you can make that earnest money nonrefundable but still protect yourself, how much you're willing to do, and if you're willing to do more during the process of the transaction.
2. Closing time frames. As a buyer in this market, especially under $1 million, you don't have time to think, shop, or make a contingent offer on your financing or appraisal. You have to have all those ducks in a row and ready to go before you even make that offer.
3. Rent-back. It's becoming extremely common that buyers have to close as fast as they can, but then they have to give the seller a certain time frame to move out that extends beyond the closing time frame.
Real estate transactions are getting even more complicated and complex lately. Our motto here at Utah Cribs is to educate you so you can make an educated decision. If you have any questions, please reach out to us. We’d be happy to help you.