How to be a “Cash” buyer but still get a mortgage to buy a home

In a market like we’re in where homes get multiple competing offers immediately, it’s really hard for someone getting a mortgage to out-offer someone paying cash. Here’s how you can offer cash and still get a mortgage.

Buying a Home / Chris


How to be a “Cash” buyer but still get a mortgage to buy a home

In a real estate market as competitive as ours is here in Naples, Florida, we sometimes have to pull some tricks out of our sleeve to get offers accepted. We all know that “cash is king” and when faced with similar cash and financing offers, sellers will almost always choose the cash offer. If you need to get financing, how in the world can you compete with someone paying cash?

The answer is simple… make your offer a cash offer and get financing behind the scenes. The fear here is that if the financing doesn’t go through, you’ll lose your good faith escrow deposits. We can almost guarantee that won’t happen though.

When we write an offer on the Naples contract, there is an area where we can check off if the offer is contingent on being approved for financings (and so we get our deposits back if it doesn’t go through) or it is cash with no contingencies. Here is how the cash portion reads:

METHOD OF PAYMENT – CASH/FINANCING WITHOUT CONTINGENCY: BUYER will pay cash, but may obtain a loan for the purchase of the Property; however there is no financing contingency. If BUYER elects to finance BUYER’s purchase of the Property through a creditor/lender, BUYER shall be required to timely perform all BUYER’s obligations under the Contract and to close on the Closing Date, notwithstanding any terms and conditions imposed by BUYER’s creditor/lender and/or any applicable disclosure, delivery and compliance requirements of the Consumer Financial Protection Bureau Integrated Mortgage Disclosure Rule (“CFPB Rule”)

This is a bit scary—if you can’t get financing by the closing date, you’ll likely be out your deposits. However, we can work around that.

The answer is simple. Have your lender do more than just write a pre-qualifiaction or pre-approval. Get fully approved by the lender’s underwriting department before you make the offer on a home. A good lender can get you nearly guaranteed to get a mortgage so you can waive your financing contingency without fear of financing not going through. Now, you’re competing on the same level as the cash buyers for your next property!

How could this go wrong?

It can go wrong without proper guidance. One of the most common ways loan applications are declined is when something changes. What if you lose your job before closing? What if you finance a new car, furniture, etc. and your debt-to-income ratio changes? These are all things that can and do happen most are easily avoidable.

Would I do it if I were a buyer?

Heck yes! First of all, it eliminates a lot of doubt and worry but more importantly, it would let me compete with the folks bringing cash. I would just be absolutely certain to not let anything happen between the time I applied and the time I close on my new home.

Who should I speak with to get approved?

Give me a call or text at (239) 248-8171 and let’s discuss some options. You can also email me at chris@listingnaples.com.


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