How To Compete Against a Home Cash Offer in Chicago

By Ressie Krabacher

As a local resident and top performing REALTOR® in Chicago, Ressie Krabacher is relentlessly focused on helping her clients move forward. She serves as an advocate and advisor for buying or selling, overseeing relocation, or adding home ownership to their financial goals.

How do buyers who need a mortgage actually compete when a home is getting multiple offers, especially cash? I recently chatted with Kyle Perks from Stonehaven Mortgage, and we dug into this challenge. We talked about a single-family home that ended up with 14 offers, and the winning bid was cash.

If you’re buying with a mortgage, here’s what you need to know to make a strong offer in a competitive market.

Understanding the market challenge. Cash offers often take the lead because sellers naturally feel confident accepting them, as there’s less risk and no financing contingencies. Going back to the home I handled that received 14 offers, the final sale to a cash buyer had made me realize you can’t just hope for the best if you’re relying on a loan. What you need is a strategy to make your offer stand out.

Preparing buyers strategically. Buyers, realtors, and lenders need to work closely as a team. When we prepare buyers, the focus is on creating a clear strategy before submitting an offer. In competitive markets like Chicagoland, buyers may need to consider offering $50,000 to $75,000 over the list price. It’s not about bidding recklessly, but about presenting a strong and well-planned offer that sellers can trust.

Strengthening financed offers. One of the things Kyle shared in our interview is the importance of showing strength in your offer. Using a higher down payment and opting for a conventional loan if possible can help. These steps show the seller that your offer is secure, reducing the perceived risk compared to other offers that might have contingencies or smaller down payments. Even small adjustments to your financing terms can make a big difference.

Using appraisal gap coverage. If you’re offering $550,000 and the home doesn’t appraise for that amount, appraisal gap coverage means you’re willing to pay the difference. This makes your offer feel stronger to the seller while protecting you from unexpected financial risk. It’s a smart way to bridge the gap between financed offers and cash offers.

Creative negotiation tactics. Another point Kyle made is that every seller is different. Sometimes it’s not about the price but about the terms, like wanting a rent-back or a specific closing timeline. That’s why it’s important to dig deeper, find out what matters most to the seller, and tailor your offer accordingly. Communicating with the listing agent can also give you the insight you need to craft a winning offer.

Competing with cash is about price, strong loan terms, appraisal gap coverage, and understanding the seller’s priorities. Each deal is unique, and having a strategic approach can put you in a position to succeed, even in a competitive market.

If you need more advice or have any questions, feel free to call us at 773-965-4100 or send an email to ressie@kw.com. We’ll help you make a winning offer sellers can’t resist.