I am newbie to this forum, it feels great to see all like minded people at one place.
I need your suggestion for finding a deal in Bay area. I am trying to buy a condo in Bay area especially Sanjose for around 250K with 25% down payment. There are many listings for around 250K but the problem is when i put the offer, the cash offers are beating me. I tried hard and this has happened multiple times already. I definitely do not want to downpay more than 25% because i want to take advantage of the low interest rates.
Folks please help me in letting know what kind of strategies do i need to implement? How to get my offer selected when there are multiple cash offers?
Hello Seetha and welcome to BP.
The problem you're experiencing isn't unique to the Bay Area. In many areas, inventory is extremely low and and the properties that are available are all getting multiple offers - usually cash. In fact, in the areas where I buy homes, you can't even get a seller to look at a financed offer. There's just no reason for them to consider an offer contingent upon financing when they have so many all cash offers. So now I only make cash offers to stay competitive.
I'm not sure of how much cash you have available, but if you could buy the property with cash you could always obtain financing after the fact and pull some of the cash (probably about 70%) back out. That would allow you to acquire the property and still take advantage of the low interest rates, although there would likely be a seasoning period (6-12 months, depending on the lender) before you could do so.
Certainly there are other strategies too, depending on your specific situation. But the bottom line is that if you may have to get creative if you want to compete for properties that are receiving multiple cash offers.
echoing what Kyle said. The problem is compounded in bay area with so many cash buyers in that price range. if you can swing it then buy it with cash and refinance/LOC etc. Otherwise you will be limited to some flips and some REOs
Thankyou David and Kyle! This really helps.
Any other suggestions are appreciated as well!!
if you are extremely confident on being able to close, you can also bid without finance contingencies. your bid is 25% with financing, but if you don't close the financing you will have to pay with cash. Just make sure you can afford to close if you don't get the financing, and you bake in enough time to close (with whatever lender you are using). this is how I am competing on my current property.
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