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How to compete in a cash market with influx of people to Florida

Realtor and loan officer offer up tips for locals
Posted at 10:34 AM, Apr 01, 2021
and last updated 2021-04-01 10:34:09-04

JUPITER, Fla.  — Ashlee Zahringer and her family have rented just shy of a decade. As her family grows, so does the need to buy a home.

“We must have looked at, I would say, 40 to 50 houses,” she said. “Everyday it seemed like we were going to another house.”

But it has not been an easy road to home ownership. At first, they made an offer on a home in Jupiter.

“We did make an offer above asking, and we offered extra cash to the seller, and we were beat by a cash seller from a snowbird, so that was disheartening,” she said.

Danielle Lawler, a realtor with Illustrated Properties, said as a local these days, you have to be savvy to compete with the influx of cash buyers in an already competitive market.

“A lot of people that are local right now are just sitting out of this market right now and waiting,” she said.

If you were living in Florida before COVID, we’re being pushed out of the market, because so many people are relocating here.

Lawler said in order to compete, you must find your lender early, go through the underwriting process ahead of time for a pre-approval.

“Get through that underwriting process, get them the information they need on the front end, you can then have that conversation with them look how quickly can you close,” she suggested.

Lawler said the faster you can close, the more you can compete with cash buyers. She said they’re seeing 21-day or faster cash closings right now. The more contingencies you can remove, the better. Realtors said for better or worse, sellers are also not keen to accept contracts contingent on the sale of the buyer’s current home.

“You have to be ready to make a move the day that property comes on the market,” said Lawler.

Evan McDonough, a loan officer and branch manger with Family Mortgage, said the demand to process loans is unprecedented.

“The rates being so low last year from COVID, everyone raising their hand to refinance, the lending world is super backed up and still is,” he said.

McDonough said try to shrink your inspection and appraisal window and get your loan done in that same time. He said it’s all about turn times these days.

“When we are up against cash offers, most times a seller will accept it, if the loan approval contingency matches the inspection contingency.”

He said one way people are competing is by writing up their offer as cash, even if they are indeed financing. It does come with a caveat.

“They have to be educated, that in the event the loan doesn’t go through, you have to be willing to lose your deposit that you put with the seller, or pay cash, because there is no out when you write a cash contract,” he said.

After being back at square one, the Zahringer family said they finally found a new place, but it came at a cost.

“It kind of felt like a miracle,” she said. “You are going to kind of have to pull out all the tricks in your bag.”