It’s challenging being a homebuyer competing against all cash buyers. “Cash is King” rings especially true with multiple offer situations, which are prevalent in the competitive $1.5M and under price segment. Last year, 45% of Carmel Realty’s transactions were all cash.

Here is a quick market snapshot to give you some perspective:

Carmel Q1 2018

• 114 average days on market
• Average Sales to List Price is 95.4%
• There were 10 full price sales and 1 slightly over asking
• 115 active listings, 39 under $2M

Carmel Valley Q1 2018

• 121 average days on market
• Average Sales to List Price is 93.9%
• There were 5 full price sales and 1 over asking
• 59 active listings, 42 under $2M

Pebble Beach Q1 2018

• 157 average days on market
• Average Sales to List Price is 93.7%
• There were 2 full price sales and 1 over asking
• 63 active listings, 22 under $2M

I represent buyers in about 60% of my transactions each year. Helping my clients get exactly what they want, ever time is my goal. Despite the current seller’s market, I’ve put together a few strategies a homebuyer can employ when purchasing with a loan.

First of all, before you even look at a house seriously, obtain a formal, written pre-approval from one of the major lenders. This way you can move quickly if you need, but you can also determine what price point is appropriate for you. A qualified buyer who is choosing to get financing is just as good as cash with this paperwork in hand.

When you are ready to write an offer, obviously price is the main consideration for most sellers. All cash buyers tend to negotiate aggressively in the hopes of paying a lower price at closing. Qualified mortgage applicants with a pre-approval in hand may need to pay more than their all cash competitors, but can also illustrate how serious they are by taking into consideration the following factors that can be equally important to a seller.

• Timing. All cash buyers can close quickly while a loan typically requires 45 days. Steve Rammel at RPM Mortgage offers a loan product that can close in as little as 15 days! Once in contract, underwriting needs to only review the offer, appraisal and preliminary title report. Some of the other major lenders can close as quickly as 25 days if the buyers have all their paperwork in.
• Deposit. Put down the full 3% deposit up front to show the seller you are serious.
• Water Requirements. Rather than require the seller to be responsible for adhering to the Monterey Peninsula Water Management District requirements, offer to take those on yourself. Those requirements include 1.28-gallon toilets, low flow showerheads and faucets and a rain sensor.
• Include a personal letter to pull at the heartstrings of the seller. You never know what will truly motivate them.

By making your offer as clean as possible, you are making the escrow easier for the seller. It is important to take the time to find out from the listing agent what the seller wants out of this escrow. Every circumstance is different and by listening to their needs, you can draft your offer with their interests in mind.

The peak season is now upon us … happy house hunting!