9 ways to crush all-cash buyers

Don’t get an FHA loan

One major downside to getting an FHA loan: You'll be forced to pay mortgage insurance premiums for the life of the loan.

But FHA loans also are unattractive to savvy sellers, who recognize some FHA buyers barely qualify because of low credit scores and are more likely to hit snags in the loan process.

If you have FHA financing, you’re not only at a disadvantage to cash buyers but also to buyers with conventional financing.

Home buyer Stacie Sheftel of Clearwater, Fla., says she had several offers rejected in favor of cash buyers even though her offers backed by an FHA loan were higher.

She eventually had an offer accepted after switching to conventional financing at a seller’s request. She provided documentation to prove she had funds to close, and because she wanted the seller to contribute 3% toward closing, she offered the asking price plus 3%.

While she had to bring more money to the table — 5% down instead of 3.5% — she finally got a home.