Is Cash Really King When It Comes to Your Home Purchase?

Is Cash Really King When It Comes to Your Home Purchase?

Accepting an all-cash offer from a buyer who has the means to purchase their home certainly has its advantages for the seller;

-Quick Closing
-No contingencies(in some cases)
-No worries of financing falling apart

For the cash buyer;

-No out of pocket expenses related to obtaining a mortgage
-No interest charges for the months to come

Investor buyers will also look at their return on investment and look for positive flow.

Cash buyers often do not get appraisals, they work with Realtors they can trust who runs comps for them so they know exactly what the house is worth.

If you are a home buyer purchasing a home in all cash, should you low-ball? Think about it, what difference does it make to a seller whether you are a cash buyer or financing other than a quick closing and a sure one. Although many sellers would prefer a cash offer over financing, they still would want to net the same amount. Why wouldn’t they?

Example 1- List price $290,000, three offers come in. One is cash $220,000 to close in two weeks, one is a conventional loan for $295,000 to close in 30 days, the other is an FHA loan to close in 45 days in the amount of $290,000 asking for 3% seller concession for closing costs and prepaids.
If you were the seller, which would you choose? If cash is king, should it be offer number 1? Looking at these three offers, number two would make sense for the sellers.

Example 2-REO/Bank Owned listing offered at $320,000. The offer comes in at $180,000. If you were the bank, would you take this offer seriously? As the listing agent, I would have to present it to the bank but they don’t have to counter back, they don’t have to do anything. You would be lucky if they countered. If you ever find yourself in this situation and doubt whether the listing agent presented your offer, then I suggest asking for their acknowledgment and rejection on page #9 of the contract.
If you really want the house, then, your offer should reflect your desire to purchase.

Often times, cash buyers think they can low ball and the seller would accept their offer because it’s all cash. This is just a myth. Seller will get paid the same amount whether it’s cash or financing. I’ve had REO listings where the bank chose the cash offer over financed one even though it was less because they removed the inspection contingency. They knew the home needed repairs and wouldn’t pass the inspection. This doesn’t happen often though, most banks are making the repairs or accepting only Conventional or Cash offers As-Is.

Working with a knowledgeable, local REALTOR® is essential. You would want to hear the truth not what makes you happy.

If you are looking to buy or sell a home in Clermont, Minneola, Groveland, Winter Garden FL areas, I would love the opportunity to speak with you. Please call or text me at 407-929-1852, email bethatalay@gmail.com or visit www.WhereToLiveInOrlando.com

Is Cash Really King When It Comes to Your Home Purchase?

 

 

Beth Atalay, Broker/Owner Cam Realty and Property Management 407-929-1852 Wheretoliveinorlando.com BethAtalay@Gmail.com Your Orlando Agent - Where to Live in Orlando