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Is Cash King or Does it Give Some Buyers an Excuse to Make Lowball Offers?

By Sandy Shores FL Realtor®, Melbourne Real Estate

Real Estate Broker/Owner with M & M Realty of Brevard Inc. BK629999

October 29, 2011 11:51 AM

Currently the majority of buyers in Brevard County are buying real estate with cash.

Is cash really king?

Does it matter if a buyer is getting a mortgage to purchase a home? Or does cash make a purchase easier?

A buyer purchasing a home with a mortgage has to be preapproved for that mortgage. They typically are required to get a termite inspection, most get a home inspection, the house must appraise for at least the purchase price. A survey of the property boundaries is usually required. Those buyers have to jump through the hoops that the lender requires of them. And, today some of these hoops can be quite stringent. Some buyers don't make it to closing and today, some houses are not appraising in today's market.

A cash buyer does not have to worry about securing a mortgage. They have the option of whether they get a home inspection and/or a termite inspection. No appraisal or survey is required on the property. BUT, very often we see cash buyers come in with much lower offers, than buyers getting mortgages. And, some sellers are not willing to, nor can they take some of these low ball offers.

I recently had a property priced at $150,000. The house was in move in condition We received 4 cash offers on the house. 3 of the offers were for $80,000 to $92,000. My traditional seller, unfortunately, was taken aback at the offers.

On the other hand, recently we closed a condo purchase with a cash buyer. The buyer opted for no inspections, no repairs, no appraisal and a 14 day closing. The only requirement was that the buyer had to be approved through the condo association for residency. They offered a realistic price, which was a win-win for the buyer and the seller. All in all, it was a smooth transaction... much smoother than some of the lender financed transactions we have dealt with lately.

Apparently, some buyers in Brevard County are realistic cash buyers, as over 50% of over transactions in September 2011 were made with cash.

Sandy Shores, Melbourne FL REALTOR®

Specializing in Residential, Investment and Relocation Real Estate

We have a team of professionals to facilitate your Short Sale.

Melbourne Real Estate / Palm Bay Real Estate

321-253-4545

SandyShoresMelbourne@hotmail.com

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Serving Brevard County Florida for 15 Years

Brevard County Resident for 36 Years

Melbourne, Palm Bay, Suntree, Viera, Rockledge,

Cocoa, Canaveral Groves, Titusville, Mims, Melbourne Beach,

Indialantic, Indian Harbour Beach, Satellite Beach,

Cocoa Beach, Cape Canaveral

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Melissa Zavala

Broadpoint Properties - Escondido, CA

Broker, Escondido Real Estate, San Diego County

I agree with you that it is important for cash buyers to also be very realistic about pricing.

Oct 29, 2011 11:53 AM

Kathy Schowe

California Lifestyle Realty - La Quinta, CA

La Quinta, California 760-333-8886

Almost all of my deals are cash-- they do give you some leverage with sellers-- and are easier to process for sure! Kathy

Oct 29, 2011 11:54 AM

Barbara Todaro

RE/MAX Executive Realty - Happily Retired - Franklin, MA

Previously Affiliated with The Todaro Team

Sandy....most of our adult community deals are cash.....with resale properties, eliminating the appraisal is a major factor......

Oct 29, 2011 11:57 AM

Dave Roberts

Healdsburg Sotheby's International Realty - Healdsburg, CA

I think cash eases some fears for the seller, particularly around appraised value issues. On the other hand, a cash purchase puts no more money in the hands of the seller than a mortgage, so a wise seller will probably choose an offer that gives them a better return whether it's cash or financed. That's assuming credit worthy buyers and a realistic price that will appraise at the level of the purchase or higher.

Oct 29, 2011 11:58 AM

Jill Sackler

Charles Rutenberg Realty Inc. 516-575-7500 - Long Beach, NY

LI South Shore Real Estate - Broker Associate

Cash is easier and faster, but like you said, the offer still has to be decent. I've had offers so awful, there was just no way to consider them.

Oct 29, 2011 11:59 AM

Sandy Shores FL Realtor®, Melbourne Real Estate

M & M Realty of Brevard Inc. - Melbourne, FL

Brevard County Real Estate, Florida's Space Coast

Melissa, So true. If the price isn't right, the seller isn't going to accept the buyer's offer and the deal is dead in the water.

Oct 31, 2011 09:08 AM

Kathy, Wow, that's great, that almost all of your deals are cash. With the right price, cash can make a much smoother transaction.

Oct 31, 2011 09:10 AM

Barbara, I agree that eliminating the appraisal in today's market can make life much easier for all parties involved in a transaction.

Oct 31, 2011 09:11 AM

Dave, I think that you summed it all up beautifully, with the right set of circumstances, a cash transaction can ease the uneasiness of a seller.

Oct 31, 2011 09:13 AM

Jill, It's all about the right price being offered for the property. Too low, it a no go.

Is Cash King or Does it Give Some Buyers an Excuse to Make Lowball Offers?

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