People selling their home are always eager to do so. As a real estate agent, you might not always have a buyer ready to go. In fact, home buyers are usually more reluctant because it’s a huge purchase. Cash homebuyers seem rare to many agents because it’s hard to find them. But let me tell you – you need cash buyers! People who pay cash for homes are not as few and far between as you think. Using cash to buy a home isn’t typical but it’s not unheard of either. I want to discuss with you how to find cash buyers and why cash buyers are necessary. If you’ve never had one, you may not be doing your buyer or seller any favors.
Why you Need Cash Buyers
There are several reasons why having cash buyers is a great thing…
Options are wide open
Number one is because they can buy any house, no matter its state. Basically, it can be an ugly house. Whether they’re wanting to flip it or buy it for themselves, cash homebuyers aren’t beholden to a banker. Have you ever searched for homes in areas that people aren’t exactly flocking to? Areas with a poor housing market can have a lack of buyers because they can’t get a loan. And why would they get a loan for a fixer upper when they don’t have the money to fix it? This is where you need cash buyers. I’ve seen houses for $20k; run down, pipes missing, in a not great area. Well guess what? There’s people living in not great areas and if they could get a loan for a decent house, they would.
So a cash buyer pays $20k and puts money in to it for the necessities. If they spend $30k in repairs, and can then sell the house for a profit, you all win. A buyer making minimum wage with good credit and a small down payment can be approved for a $100k loan. And that’s $50k in profit, minus your fees. They put money in to a home that a buyer in the area simply couldn’t afford to invest in. And that will in turn bring up property values in that area.
Feel more comfortable
Another reason cash homebuyers are important is that a seller can feel comfortable about the actual sale. If someone wants to buy their home for cash, you know the buyer isn’t going to be too nitpicky. A cash sale means the buyer just wants to get it done. They likely aren’t going to be fussing about inspections and whatnot. And if the seller doesn’t have to worry about repairs or banking, it makes it easier on them too. I’ve found people that want to pay cash for homes that just the deal to go through. And I can sell a seller on that fact alone! No hassle, no back and forth – just a buyer to take over so they can get something new.
Better for everyone
Now, you certainly don’t need cash to buy a home but if you have it, it’s better for you too. With cash, you have leverage on getting a cheaper price. This is because all the fees associated with the transfer of funds, interest, etc will be lessened or not applicable. So, it’s good for the seller and buyer but it’s also good for the Realtor too! As a Realtor with cash buyers, you can easily find a seller. Your primary goal as a Realtor should be to help your clients. You want to save your buyers money and make your sellers as much money as possible. Cash buyers are the best way to that goal.
How to Get Cash Homebuyers
So, the question you’ve probably been asking yourself is, “How do I get cash buyers?” The most important thing I can tell you is that you’ve got to get connected through other connections. As Realtors, we typically attend a few training seminars a year if we’re motivated. To find cash buyers, you need to attend more seminars that vary in topic. There’s a lot out there that are aimed at buyers, not Realtors – you need to be attending those. And not just attending but also mingling with the crowd. Really get to know the people there and their goals. Check out real estate investing networking groups. Find meet-ups geared toward helping buyers. You can even offer free seminars for cash homebuyers yourself. It can take a lot of work but what you get out it is connections you wouldn’t have otherwise had.
There are a lot of topics you can search: buying real estate, investing in real estate, cash flow real estate… Maybe even home flipping, wholesale flipping, fix and flip, all kinds of stuff that you can learn by attending. And most importantly, you get to make those connections. Other Realtors have the same idea so what you need is to be different. You need to have knowledge of these areas, a genuine interest in people, motivation, and a great salesperson. Let’s be honest – you should be these things anyway. The main point here is that you don’t want to be just another Realtor.
Cash buyer goals
First time cash buyers may have an inflated sense of power so you have to work them delicately. Paying cash for a home isn’t about ripping off a seller – it’s about making a mutually exclusive deal. Both parties have to come out of the deal happy. Ask questions like you normally would. Price range, condition of home, and what type of investment opportunity would make them happy overall. Now if they’re flexible on things, they’re going to get a better deal by paying cash. Let’s look at an example:
If your buyer is willing to take a house with issues and pay cash for it, now you’ve got leverage with your seller. I knew a seller who was desperately trying to sell their fixer upper for over a year. But their Realtor couldn’t deliver and I ended up finding them. I found that this seller wanted to get out from under this property for more than it was worth. I had a buyer willing to pay cash for the property for about 20k less than the seller wanted. Here’s the thing… I had a buyer already. The seller had already spent a year’s effort trying to get a sale. I asked my buyer to pay 5k more than they wanted and the seller to take 15k less than they wanted.
“How much is a year worth of time and effort worth to you, in a poor market area?” I asked the seller. A figurative light bulb lit up over their head and we closed a few weeks later.
Lastly – legitimacy
Are all the cash buyers who put themselves out there legit? Are they all going to make offers on every property? Of course not. So you need to build a portfolio of cash buyers. These are relationships, again, that are mutually exclusive. A house about to go on the MLS matches the cash criteria for one of your buyers? Get in contact with them first and let them know so they can make an offer right away. Cash homebuyers may work with more than one agent and that’s okay – we all bring something different to the table. That is a massively effective way to add horsepower to your business. When an opportunity comes you’re prepared to meet that opportunity because you have buyers in your contact list.
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