Buyer Question: Can I beat a cash offer with financing?

by Brian Huie on 4/1/2024

Yes, most listing agents will advise their seller that underwritten preapproval > cash.

If all other areas of two offers are similar in strength, a knowledgeable listing agent will advise their seller that an offer with financing backed by an underwritten pre-approval is actually safer than the cash offer. Additionally, these buyers close very quickly, often just as fast or faster than a cash offer. 

I recommend that my buyers work with a reputable lender who offer underwritten preapproval. The lender is an important part of our buying team, and one area to consider when selecting your lender is whether they offer this service. By going through the underwriting process before you make an offer on a home, you are showing the seller that you are not only very serious, but also that you are a safe choice, because the lender has already verified that your finances are safe and ready to close on the home. This is distinct from a traditional preapproval, which has not undergone the underwriting process before making an offer.

As opposed to a cash offer, pre underwritten preapprovals have the financial backing of the lending institution to prove their ability to close. A cash offer needs to provide documentation of available funds to purchase, typically a bank statement. Unfortunately for the seller, this means that the buyer could potentially default on the purchase if the funds are moved at any point between obtaining the documentation and closing, because a bank statement is just a snapshot of the account from one moment.

For more information on what a seller will consider when determining how strong a buyer’s offer is, click here.