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When buying Miami Beach real estate, buyers who need financing often get frustrated because they realize that although they may be preapproved for a mortgage, many sellers are just not interested in their offers.

As an agent who works with sellers and buyers, I have seen both sides. It’s annoying because many buyers do need financing, and it can be hard to compete with the cash buyers out there. The last time I looked about 70% of condominium purchases were completed with cash and about 50% of single family homes, the same. The ranges vary month to month and by neighborhood.

However, cash is king in our market. The good news is; the second best thing is a qualified buyer with financing.

Last year we had clients who wanted to buy a single family home on the beach, with a VA loan and at around $400,000. Do you know how challenging are those criteria? Challenging. Our buyers committed to us, and we committed to them. We educated them about the process, the lending process and what to expect. They were super prepared and in the end they bought a single family home, renovated with a new roof on Miami Beach for under $410,000 with a VA loan.

We beat out other cash offers. It can be done.

So here are a few tips on how to beat cash buyers when buying Miami Beach real estate.

• Don’t be a secret buyer.

Unless you are a very experienced buyer, if you need financing, you shouldn’t be a “secret buyer”.  I call, “secret buyers” those who aren’t willing to commit to any one agent and just call around from agent to agent. Of course, you don’t have to hire an agent to work for you but if you are not an experienced buyer, you may waste a lot of time looking at properties that aren’t eligible for financing. Thus probably making offers on properties that do not qualify for financing and in the end… getting beat out by cash buyers.

Do things correctly from the beginning. Interview agents. Do a buyer’s consultation. Know your buyer’s net sheet numbers. Talk to your lender about the type of properties eligible for financing and spend your time with a professional agent. Know what types of properties you can buy and spend time looking at those types of properties. When you find a property you like have your agent prepare a very strong, professional offer with a nice cover letter including a real lender preapproval.

You will have a better chance of getting your offer accepted if you are making offers on qualified properties, with a professional and in a professional presentation.

Case in point. Recently I met this really nice lady at one of our open houses. She made an offer on the property we listed (she is a first-time buyer, no experience and needed FHA financing). Our listing doesn’t qualify for FHA financing. So not only did she waste her time seeing the property, she lost her time preparing an offer. Not knowing what you are doing can be costly, time-consuming and frustrating.

• Hire an experienced professional real estate agent.

If you need financing, you are already starting off with a challenge. Be sure to hire an experienced real estate agent who knows what they are doing. When I say “experienced” I don’t mean your best friend’s friend who just got a license. I mean “experienced.”  Anyone can look up properties on the MLS and show them to you. It takes an experienced real agent to know what types of properties are eligible for financing, how to guide you through that process and pitfalls to look out for and warn you about those.

Case in point. I recently had a property listed for sale. The property was not eligible for financing. One, the sellers didn’t want to accept financing and two, this type of property was not eligible for financing because of some building issues. I had a lot of buyers (without agents) call me wanting to see the property. The majority needed financing. Of course, I assisted them as I could and tried to explain but they didn’t want to hear it because they didn’t wish to spend the time to understand truly the process. Secret buyers shoot themselves in the foot because they don’t know what they don’t know.

Hire a professional who knows.

• Use a lender who is experienced in our market.

Sellers don’t want to go under contract with an unqualified buyer with a “weak” preapproval letter. I encourage my sellers to consider offers where the buyer has a strong letter. Not a prequalification letter, where the lender just did a quick check. What I am looking for is a specific preapproval where the lender pulled detailed information and the buyer is approved, now they just need to shop for the home. I don’t want my sellers to risk going under contract with an unqualified buyer. It’s a waste of time for everyone.

Use a lender who takes the time up front to process a strong preapproval.

• Don’t put a gazillion contingencies in the contract. 

With financing contingencies, you already have some pretty heavy contingencies built into your transaction that make it easier for you to cancel if the lending doesn’t work out. Not to mention the super long time frame to close. If you add on more and more contingencies, your offer becomes weaker and weaker. Don’t add a ton of extra requests.

• Act fast and make a good offer.

If you find a good property write an offer on it the same day. Don’t take two days to think about it. Get in there first before everyone else and get an offer in asap. Some sellers are so ready to get the property sold, and they accept the first offer that comes in immediately. **Remember if you and the seller start countering back and forth on offers, you are creating an opportunity for other offers to come in. Get the contract executed asap.

As an agent who also works with sellers,  often the cash offers just make more sense. But that doesn’t mean that buyers who are making offers with financing aren’t qualified buyers. They just need to be strong buyers and present themselves in that way. Sellers need to feel comfortable with buyers who need financing and confident that once the property is under contract, it will close.

Beating cash buyers is not impossible you just need to prep yourself in advance, spend time looking at the right properties and make a strong offer quickly.

If you have more questions, I am happy to help you.