Insight on cash buyers?

Question

John Teachout · Answer

I was closing on a property today and was chatting with our Realtor afterwards and she was talking about a closing she has coming up on Monday that has been a nightmare. The closing was extended 4 times due to complications with the financing (even though the buyer was pre-approved)

So I agree that a cash buyer has some advantage, especially if time is of essence. I make cash offers and hear "no" quite often but I just move on to the next one.

In reality, the "all cash" closing I attended today had been extended three or four times too (I lost count) but that was due to govt. ineptness.

Kelly B. · Answer

Hi Jordan,

Around here it is usual to see properties bought for 5 to 10% under listed price, is `appraised` price close to listed price?

Also, you need to consider time on market/holding costs and the joys (delays/inspections/fixes needed) for buyers with FHA loans.

That being said, I don't think a cash offer precludes some negotiations.

JD Martin · Answer

Well, it's always a gamble. I pay cash for houses (not that expensive!) and I will tell you that I make very low offers, and I expect to get the house for those amounts because I am assuring you a deal with no appraisal or financing contingency. So it is in the seller's court how bad they want to sell the house. I have missed some where they wanted more money and were willing to chance the financing side of things, and I have walked from some where they didn't want to pay up, and then they came back later offering the house for less than what I was willing to pay but I had already moved on to other deals.

Financing and appraisals sink *a lot* of deals. Someone who can just write a check is going to have an advantage on someone who needs the bank to play along.