What does your typical offer look like?

Question

Ready to make offers on off-market deals and want to make them as appealing to the seller as possible but not sure what is typical/realistic timeline for cash offers. What does a typical cash offer look like for you when you’re making them?

Erik W. · Answer

@Brittany Mineard, hi and welcome to BP!

I have closed cash offers in as little as 5 days.  When there are no lenders, surveyors, inspectors, or appraisers involved, real estate can change hands very quickly and cleanly.  Basically, all you need is a Title Company or attorney that can run a title search quickly and schedule you a time slot.  Then on your merry way to the bank to pick up a check for certified funds, or to arrange for a wire transfer.

The thing about ALL CASH, NO INSPECTIONS, and QUICK CLOSE is you must know what you're doing.  Even a "cheap" house can be a disaster if you find the entire thing is eaten up by termites after closing.  I hired a full inspector for my first 5 deals and I followed him around asking questions about everything. I made check lists.  I looked at well over 200 properties.  I knew my values and got very good at spotting the expensive problems quickly.  Even then, I still occasionally made mistakes; for example, no one told me it costs and extra $3,000 to redo a shake shingle roof.  I didn't even know what that was until we bought a house that had one and did a roof replacement 2 years later.  C'est la guerre!

My typical all cash offer is designed to get a steep discount, so I offer ALL CASH, NO INSPECTIONS, close in "as soon as 5 days if seller provides marketable title free of encumbrances", which protects me in case there are title issues that have to be hammered out.  For that, I don't pay over 70% of fair market value "as is".  Usually I aim for 60-65%.

Not many people are willing to give away that much equity, but the few who are is where I make my money.

Mike Cumbie · Answer

Hi @Brittany Mineard

It is going to depend on where you are and things like how clean the title is. I just had a cash offer close on a piece of land last week. It was supposed to close July 3rd. That was giving 4 weeks (We need 4 weeks even with cash here). I hear some people can do it in 3 days. I wish I was in those markets sometimes :)