Buyer Tips

Where Are All These Cash Offers Coming From?


Here's how to compete with the large cash offers people are making.

There’s one question that my buyers keep asking me: “Todd, I’ve put in offers. They’ve been strong offers. Unfortunately, I seem to be getting beat out by cash offers. Where is all this cash coming into the marketplace from and how are people affording these homes with cash?” After doing some research, I learned a couple of different things.


There are people that have a lot of equity in the home that they currently own, or they have no mortgage before they sell. They’re getting a home equity line of credit Then, with that home equity line of credit, they’re turning around and buying their next home with cash.


“We can always find ways to show you’re a strong buyer.”


Another method that I’ve found is if somebody’s been working and they’ve been putting money into a retirement account. They’re borrowing against that 401(k) to have the cash available, and then they are paying cash for that home.


In both these scenarios, once they move into the home, they are turning around and refinancing for themselves and putting that money back where it belongs before the time frame is up and they owe penalties and have to pay taxes on that. However, I’m not telling people to go out and empty their savings or turn around and do a home equity line of credit. Always talk to your financial advisor before you do anything like that. If you’re in a position to do that, fantastic. If not, we can always look at other ways to help you and show you as a stronger buyer.


As a matter of fact, there is a video I did earlier this year showing you how to be a stronger buyer in this market, without having to bring additional cash. I’ll link it here.


If you have any questions or concerns or you just want to chat, feel free to reach out to us directly at 502-200-1980 or email us. We look forward to talking with you. Have a great day.