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Updated about 14 years ago on . Most recent reply

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Ken Yearwood
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Discount for 100% cash purchase?

Ken Yearwood
Posted

I have heard of instances where investors include a "discount" in their offer/purchase price for purchasing properties with 100% cash.

If this is common practice, what kind of discount are we talking? A percentage? Or a flat 20-30k (just to throw out numbers)?

Any thoughts?

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Will Barnard
  • Developer
  • Santa Clarita, CA
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Will Barnard
  • Developer
  • Santa Clarita, CA
ModeratorReplied

Ken, I would like to toss you back a question. Why would you want an answer to your question? In other words, if you get an answer, say 10%, what do you plan to do with the answer?

My point is that any answer given to your question will be wrong and here is why. There are thousands of variences in real estate and thousands more of reasons for why one would be selling. Discounts are negotiated due to specific factors and circumstances present in each and every deal, no two deals are the same (similar to snowflakes). Attempting to assess an "average" discount for a cash offer is useless for individual circumstances.

There are very few shortcuts to success. Do your homework on each deal, crunch the numbers accordingly, and make your offers based on your due diligence, not some average guess work of a discount.

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