Cash is NOT Always King!

 

Cash is NOT Always King! About 3 years ago when the market took a turn south, I started to encounter many "all cash" buyers who were ready to JUMP on the deals! And in the beginning, when financing seemed to "freeze" a bit and buyers "dried up", Cash Was King!. But that "freeze" didn't last long and there are still some buyers who think Cash Is King.

Well, yes and no..

I would like to give my opinion of when I think "Cash Is and Is NOT King".

Cash Is King When:

• You are in a Multiple Offer situation and all offers being equal-yours is cash (there may be a little wiggle room, but not much"
  
• Property doesn't qualify for financing because of condition
• There is no financing or high interest rates.(not the case in today's market)
• If seller has no other offers on the table.
• Some Foreclosures.

 

Cash Is NOT King when:

• Property is priced at market value and there are multiple offers,and you have a low offer realitive to the others.
• People can still get loans at 3-3.5% down (FHA-Homepath). These folks are willing to higher in the purchase price (assuming the property will appraise).
• You are Low Balling offers on a property that is clearly worth more.
• There is still an old mind set that Cash Is Always King. The bottom line is that it is some times true, but only when there is no other financing available. The exception to that is a very desperate seller who MUST close in a few days.

So while I understand the need to get the best deal possible (who doesn't want a good deal), go ahead and test the waters with your initial offer, but be prepared to come up in price if this is a home you really want. And...if you are in a multiple offer situation, be ready to put your best foot forward because many sellers would prefer to wait the extra 15 days to get a stronger sales price from a conventional buyer. Wouldn't you?

Copyright © 2010 By Stephen Munson,Munson Realty –Homes For Sale Pasadena ca*Cash is NOT Always King!*