Buying Homes in Las Vegas: The IMPACT of CASH OFFERS
Feeling overlooked because of cash offers in your house hunt? You’re not alone. Today, we’re tackling how you can level the playing field. I reveal my own personal strategies to make your financed offer more appealing to sellers.
Let me give you a quick rundown on the current Las Vegas real estate market. We have been in mostly a Sellers’ market for the last 10 years. Our market has fluctuated from a 6-month supply to as low as a 3-week supply of inventory. Over the last several years we have seen a significant trend of cash buyers purchasing homes in Las Vegas.
Cash Offers in Real Estate mean that the buyer is purchasing the home outright without the need for a mortgage or financing. This tends to be attractive to sellers, especially in a market like Las Vegas, which has been hot in recent years. This is because there are fewer contingencies with cash offers as they are not contingent upon appraisal or financing, so cash deals reduce the risk of the sale falling through. Usually, there is a 7 – 10-day due diligence period for inspections and that is it. The Sellers know the deal is moving forward quickly and the home can close sooner so the sellers often get their money faster.
We are seeing more cash offers here for a couple of reasons.
- Buyers are relocating here from California and from other more expensive markets. They are selling their million-dollar homes premium and coming to Vegas with significant cash reserves.
- Las Vegas has become a destination for retirees who often come with their finances sorted and prefer to buy a home outright for cash.
- Investors love Vegas because it offers strong rental potential and relatively affordable prices compared to other big cities. In fact, we have seen wall street backed companies that have purchased thousands of homes here over the last couple of years. They purchase properties for cash and rent them out to keep as part of their real estate portfolio.
Cash offers have a significant impact on buyers who rely on financing. In a competitive market like Las Vegas, financed buyers often find themselves in a tough spot. Buyers who are obtaining a VA or FHA loan generally are putting less money down and often need the Seller to help with closing costs. Sellers tend to favor cash offers because they come with fewer contingencies and a quicker, more certain closing. As a result, financed buyers may lose out, even if their offer is slightly higher.
I’ve had success stories with financed buyers who managed to secure homes despite the competition. One couple I worked with was determined to get their dream home, and they knew they were going up against cash buyers. They made sure to get pre-approved, and we crafted an offer that was not only competitive in price but also appealing in other ways. We waived some minor contingencies, offered a flexible closing date, and allowed the Seller to rent back. In the end, the sellers chose our offer over the cash buyer because they loved the idea of having time to find another home and not be rushed.
While cash offers can be tough competition, there are several strategies financed buyers can use to make their offer more attractive to sellers. Here’s how you can strengthen your offer, even when financing is involved:
- Obtain a Pre-Approval Letter from a Reputable Lender
One of the most important steps in making a financed offer competitive is securing a pre-approval letter from a well-known, reputable lender. This shows the seller that you’re serious and have the financial backing to complete the transaction. Pre-approval is stronger than pre-qualification, as it involves a more thorough review of your financials. Having a letter showing you are approved and have already taken steps toward full loan approval can provide the seller more confidence in your ability to close the deal. - Increase the Earnest Money Deposit
Another way to show serious intent is by offering a larger earnest money deposit. This is the upfront money you put down when making the offer to show you’re committed. Increasing this deposit demonstrates to the seller that you’re confident in your ability to close the deal and are willing to back that up with more money at stake. A higher earnest money deposit signals that you have the funds available and that you’re less likely to walk away from the deal. - Waive or Reduce Contingencies and have a quick closing
Cash offers typically come with fewer contingencies, which is part of why they’re attractive to sellers. Financed buyers can level the playing field by waiving or reducing contingencies. You can shorten contingency periods for inspections, appraisals, or financing, which helps show the seller you’re committed to moving the process along quickly. If you are pre-approved and ready to go, the lender can expediate the underwriting process and obtain the appraisal and full loan approval quickly. Also, see if your lender can offer a faster closing to match the pace of cash buyers. Even shaving a few days off can make your offer more appealing. - Offer a Flexible Closing Date
Understanding the seller’s needs and adjusting your offer to accommodate them can help make your financed offer more attractive. Sometimes sellers may need extra time to move out or coordinate buying their next home. We have a post possession addendum that allows the Seller to remain in possession of the home for up to 60 days after close escrow. This can make your offer stand out, even against cash buyers. - Consider Offering Above Asking Price and agree to pay over appraisal
In highly competitive markets like Las Vegas, it’s not uncommon for cash offers to come in at or slightly below asking price, relying on their speed to win the deal. As a financed buyer, you can make your offer more attractive by offering above the asking price, assuming it fits within your budget and the home will appraise for that amount. Additionally, You can agree to pay a certain amount over appraisal. For example, you can agree that should the home not appraise at the sale price you will pay $10,000 over appraisal not to exceed the sale price. While price isn’t everything, it can sometimes tip the scales in your favor. - Work with an Experienced Realtor
Having a skilled and experienced realtor on your side can be crucial. I know the real estate market well can help you craft a competitive offer. I always communicate with the listing agent to understand the seller’s needs, and negotiate terms that strengthen your position, even if you’re going up against cash buyers.
By taking these steps, financed buyers can show sellers that they are just as serious and capable of closing the deal as cash buyers. It’s all about making your offer stand out and demonstrating that you’re prepared, flexible, and ready to move forward smoothly.
