There are smart ways to overcome a cash offer for that apartment, condo or co-op your buyer really wants. NYC’s Confidence Stimpson outlines how to go about making your buyer’s offer more competitive.

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You’ve finally found your buyer the perfect apartment, condo or co-op. They are well-qualified, and their bank has issued them a pre-approval letter. But there are two other offers on the table, and they’re both all-cash, non-contingent.

Homebuyers who offer cash are 334 percent more likely to win a bidding war than those who finance, according to a March Redfin report. And your buyer is financing.

It’s true that if the other offers are higher than theirs and all cash, the situation is probably hopeless unless one of them wants to keep a pet cheetah in the apartment and the other one practices the trumpet at 3 a.m. But if this is not the case, there are ways to make your buyer’s offer more competitive.

Try an incentive

They can try an incentive, such as offering to let the sellers stay in the apartment for a specified number of days — say, five to seven — after the closing, so they have time to close on their new place and even paint it before moving in.

Or, let’s say 60 days have passed since the package was submitted, and the board still hasn’t approved the sale. The buyer’s offer could include a provision that if this should happen, they will cover the maintenance or common charges from this point until the closing.

Ensure that your buyer’s financing is basically guaranteed 

Of course, the offer should be as high as the buyer can afford. This is not a time to try to bring the price down. It should also be non-contingent on financing — or anything else. It must be just short of absolutely guaranteed that the financing will come through. Not only the buyer but also the building must be qualified by the bank, and this should be stated in the bank’s letter of approval.        

If an early appraisal is not possible, the buyer should be able to guarantee that if the bank’s appraised value is lower than the contract price, they can make up the difference. 

Your buyer’s mortgage broker or bank may have some other ideas of what can make it clear that financing will, in fact, be forthcoming. Don’t be afraid to ask.  

In New York City specifically, it should be clear that the buyer is qualified to pass the co-op board. You as their broker should consult with the managing agent to make sure the co-op has no unusual rules that the buyer might not be aware of. (I know one co-op that does not allow pianos in any of the apartments.)

Don’t rely on the information that comes with the listing for pet policy, financial requirements, etc., but check these yourself with the managing agent. If the managing agent isn’t available, ask the seller’s broker to verify.

Don’t even think about renovations until after closing

At this point, your buyer should have no plans to renovate except for painting and (maybe) refinishing the floors. They should plan to live with the property as-is for a while before planning any serious renovations.

Don’t just document, over-document

Information about all of the above should be included in the offer letter, accompanied by the approval letter from the bank and as detailed a financial statement as possible.

If the buyer’s assets include real estate, they should give the basis for the value they’re quoting. The same goes for automobiles and personal property. They should consider including a reference letter from their employer, another from their current landlord or managing agent, and one from their financial adviser or accountant.

Have your buyer write a love letter 

The buyer may also want to include what is called a “love letter,” that is, a letter describing what they and their family love about the apartment and why they want to buy it.

Make sure this is about the apartment, not the buyer — the lovely park views, the great layout with split bedrooms, the excellent location, etc. (They should be careful not to include personal information such as faith, children, or occupation that could lead to charges of discrimination, according to Fair Housing Act rules. In other words, don’t include something like “the location is great because it’s close to the Methodist church they go to.” It’s just great because it’s great. And some would argue that buyer love letters are not a good move regardless.)

Money talks. Have your buyer send a check

If your buyer is buying from the sponsor in a new development, have them fill out an application and send it along with the offer letter and a check for more than the standard 10 percent of the purchase price, say 15 percent or 20 percent, clearly labeled “contract deposit for purchase of [address].”

This will show they are really, really serious and ready to move. Of course, this means their attorney has already read the offering plan and done whatever other due diligence is necessary.

If the property is a resale, the buyer should consult with their lawyer to see if the lawyer is comfortable with the buyer filling out their information on a standard Blumberg contract and sending it to the seller’s broker with a check. 

If all of the above fails …

If all this fails, and somebody else wins the bidding war, tell them there are more than 300 million people in this country who don’t live in that apartment and don’t mind a bit. There are plenty of other apartments, and you and your buyer will find another great one together.

Confidence Stimpson is a licensed associate real estate broker with Coldwell Banker Warburg in New York. Connect with her on LinkedIn. 

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