I made 2 all-cash offers and still lost bidding wars for houses. Here's my new strategy.
Making an all-cash offer doesn't guarantee you'll get the house.
Although mortgage rates are relatively low right now, it's not a great time to buy a house. Inventories are still pretty low and home prices remain fairly high in many parts of the country, which means it's a seller's market.
Unfortunately, I have to purchase a home in this market. And in order to try to be more competitive and actually be able to purchase a house, I decided I was going to make an offer to pay for the house in cash.
A cash offer tends to be more attractive to home sellers because you don't need an appraisal and it isn't conditioned on a bank agreeing to provide financing.
But despite the fact that I made all-cash offers at the asking price on two different homes, I still ended up losing out on the properties I wanted. Since buying a home is a necessity, here's what I've decided to do to land a property.
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Expanded my geographic scope
While I was hoping to purchase a home in a very specific area, it just so happens that my desired location is a very competitive one where there's tons of demand. That's one of the big reasons why I wasn't successful in getting my offer accepted. People actually made cash offers that were well above the asking price.
To help reduce the chances I'll end up in another bidding war, I've started to look slightly outside of my chosen area. I'm not willing to go too far because location is really important, and I don't want to regret buying the house later. But I'm being slightly less picky and expanding my search to look at a few new neighborhoods that I feel I'd be almost as satisfied with.
Re-evaluated my must-haves
The last time I bought a house, it was a buyer's market, and I was able to take my time looking for the perfect home that checked all my boxes.
Since the situation is very different right now, I've made a revised assessment of what's important to have. For example, since the view is really important to me, I've decided I'm willing to compromise slightly on the size of the lot in order to be able to get it.
Lowered the price range of houses I was looking at
I've also lowered the price range of houses I'm looking at. Before, I was shopping for houses that were near the top of my budget that I had set for myself. After all, I was willing to spend a certain amount, so it appeared to make sense to look at homes in that price range.
Unfortunately, I didn't count on having to make an offer that is above the asking price in order to be able to buy a home. Now that I know that, I've reset my search parameters so I'm looking at homes with a lower starting price. That way, I can make an all-cash offer above the asking price without exceeding the amount I'm comfortable spending.
None of these things are ideal, but they are going to help me maximize the chances I'll get into a home that I'm happy with on the timeline that works for me.
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