While it’s true that sellers often prefer all-cash offers, it doesn’t mean you can’t compete if you need a mortgage.
There are ways to get a loan where you’re considered close to being like a cash offer. Those loans are often fully underwritten…meaning you’ve gone through a deep approval process. The loans might also be called up-front underwriting, full pre-approval, or decision-now approval.
It’s not exactly the same as cash, but it’s almost as good. The loan has already been funded and the lender has verified that the remaining portion of the sale price is accounted for. That means the buyer can more comfortably remove the loan contingency from the offer without worrying about losing their earnest money deposit.
Sellers see an offer that has a loan on it, but it’s a fully funded loan, which makes them a lot more comfortable.
There are risks. The buyer could have a catastrophic accident that prevents them from completing the terms of the loan (like losing their job before the loan is closed). But that could be true of an all-cash offer, too. In either case the seller has the same recourse…to claim the earnest money and move on, typically.
Not all lenders offer fully approved, underwritten loans. It’s important to shop around and ask. Many larger banks won’t do this, because it clogs up their automated loan pipeline. For this sort of loan, you might be better off checking with a broker (not a bank lender or an online loan portal).
A mortgage broker should be able to help you find the right lender for whatever loan products you’re looking for. Let me know if you need a referral. (718) 399-3320