Tips for Buying a Home When Competing Against a Cash Buyer

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 Family Running to New Home with Sold Sign

Each summer, the military community hears of the horrors of moving. From delayed delivery of household goods to months-long waiting lists for installation housing, something different fills the spot of "main pain point" each year. In 2022 a combination of low inventory, an increase in house cost and high demand for housing is making purchasing a home very difficult. When adding in the current influx of cash buyers, military families are losing out on their desired homes left and right.

The Latest PCS Challenge: Cash Buyers

The military is still catching up from the postponed moves from 2020, and the housing market isn't helping. At the end of 2019, the national inventory for available homes dropped by almost 40%, and it hasn't increased by much over the past two years.

Many families have less than a few months to complete the home-buying process, from finding a home to making an offer to closing, and this year the added stress of competing with cash buyers is overwhelming.

Why Are People Buying with Cash?

All-cash buyers are favored by sellers because the sale closes faster, and there isn't a risk that the bank won't approve the mortgage. Many non-cash offers will lose out on a bid on a house to a cash buyer.

In a January 2022 report from the National Associations of Realtors, 27% of home purchases were made by a cash buyer. Cash buyers are four times more likely to win a bidding war, according to a Redfin report that included 2021 data. There are many benefits to buying with cash, but it's not possible for everyone -- particularly for military families -- without some finagling.

What Does This Mean for Everyone Else?

There is a way to compete with these cash offers, even without a giant pile of money hidden under your mattress. Lenders have all-cash offer programs, allowing for competitiveness among other offers and a quicker closing process -- both of which sound good when you are months away from PCSing.

Some lenders help military families with an all-cash offer program. Permanent financing can be a Department of Veterans Affairs loan to help reduce stress, save time and secure the new home. Through those programs an affiliated company buys the house and then sells it back to you for the original price, plus a small fee for using its cash. You can then secure your mortgage with that funding and purchase the house traditionally, without losing out to a cash buyer.

Find a VA Loan

If you're ready to move forward, or just want more information, the first step is to get no-obligation rate quotes.

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Personal Finance PCS