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Do I Need A Cash Offer to Win A Bidding War in Houston?

March 7, 2022 | By Mendy Rimler

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If you're in the market for a new home, there's a good chance you've come across a bidding war. It can be tough to win one when another party has put cash on the table, but it's not impossible.

In this blog post, we'll discuss what cash offers are and how they can help you beat out your competition. We'll also tell you if cash offers are necessary for Houston's hot housing market and give you some tips on how to beat one!

What is a Cash Offer?

Most people who own homes carry a mortgage. That means they use cash for a down payment on the home and use a mortgage loan to finance the remainder. 

When a buyer makes a cash offer on real estate, it means they don't need to use a mortgage. They already have enough funds in the bank to buy the property, or they'll have the money after selling their current home or other assets, such as stocks.

Cash offers on homes in Houston are on the rise, as the market heats up and demand is greater than the available supply of homes for sale. Let’s take a look at some of the pros and cons of a cash offer on a house and what you can do to help your case when you are buying a home in Houston.

How It Can Help

In a bidding war, cash is king. That's because the seller knows they'll get paid in full and on time if the buyer has already lined up the financing. A cash offer also shows that you're serious about buying the property and aren't likely to back out of the deal. A cash offer helps by showing the seller you’re ready and able to complete the purchase, which is their primary goal. 

Is It Necessary?

In most cases, cash offers aren't necessary to win a bidding war. However, in hot housing markets like Houston and elsewhere in Texas, cash offers can give you an edge over the competition. 

If all of the other buyers are putting down conventional offers, using a financed mortgage, and you put down a cash offer, the seller may be more likely to choose you. However, if you aren’t in a position to make a fully cash offer on a Houston home, don’t despair!

How to Beat a Cash Offer on a House in Houston

If you're up against a cash offer and don't have the funds to match, don't give up just yet! There are still some things you can do to increase your chances of winning the property. Here are a few tips:

- Be prepared to move quickly

A cash offer gives the seller an immediate sense of security, so they may be more likely to choose the cash buyer if all other things are equal. If you're not prepared to close on the property quickly, you may lose out. Getting a pre-approval letter from a trusted mortgage company can help make your case. 

- Make the highest offer

Traditionally, the best way to win a bidding war is to offer the most money. Although the highest offer isn’t guaranteed to be the one that the seller chooses, money does make a big impact. However, even if you’re willing to aim high, make sure your offer is feasible for you financially. 

Bidding wars and home buying are emotional. So while you should make a competitive offer, make sure it’s one you can live with. 

- Sweeten the deal

If you can't match the cash offer dollar for dollar, see if you can add other incentives to your offer, such as paying for the closing costs or agreeing to a longer lease. Additionally, you may be in a position to waive contingencies, such as if the home doesn’t appraise for the sale price. In this way, having some extra cash can help close the gap without needing to pay for the entire home in cash. 

- Make a strong case

People are often emotionally attached to their homes. While a seller looking for a cash offer on their Houston home might think money is their top priority, they may be swayed by emotions. That can create an opportunity for you!


Pen a letter to explain to the seller why they should choose you over the cash buyer. Maybe you have a great credit score and can get approved for a mortgage quickly, and you’d love to raise your family in their beautiful home. Or maybe you're already living in the area and can share some insider passion for the neighborhood. Whatever your reasons, make sure you can back them up and express them well. 

Bottom Line

When it comes to bidding wars, cash is typically the trump card. Thus, if you're in the market for a new home in Houston and want to win against a cash offer, be prepared to move quickly and make a strong offer. And most importantly, be prepared to sweeten the deal with other possibilities and make a strong case for why the seller should choose you over the cash buyer!

There are a lot of questions that come up when you're trying to buy a house. One of the most common is whether or not you need cash to win a bidding war. Hopefully, these tips will help you beat a cash offer if you find yourself competing against one. 



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