Insight on cash buyers?

3 Replies

Hello BP!! Looking for a little insight into my current situation on one of my listings. This is my first time having a cash offer on a property and I would like to guide my client in the utmost confidence. If the cash offer was 10k below the appraised value what would be the ideal route to go? I feel as though a counter could lose the deal before it even really had a chance but is that too low? The house is listed in the area of 175-200k and has only been on the market for a couple of months. Thanks in advance!

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. 

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. 

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.

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