I'm still LMAO with your "more skin in the game since Jesus of Nazareth's briss!"  OMIGOSH that is the funniest. Hilarious.  But kidding aside, what if the all cash investor does nothing to improve the condition of the homes they are buying?  That's scary.  Renters shouldn't get stuck with the unkown either.  Buyers in competition for homes need to know what they are buying.  A good inspection is like exploratory surgery.   

Hey Mr. Nekid King!  Like you, I cannot imagine buying a home with no inspection unless I was going to level the thing and start from scratch.  And you are a funny, funny man!

Very nice blog, one of the better ones that I have read in a while. Some great lines!

It's gotten to the point where I almost shy away from buyers who can only afford bank-owned properties because of the chance of them falling through.  Notice I said almost.  What's needed for these mostly FHA buyers is a good education.  As long as they know that because of the condition of the homes, they are likely not going to be able to buy it, the will not insist on seeing all of them that come on the market. 

David

John, If my buyer wishes to make a cash purchase I would advise and inspection always, and why would you leave yourself strapped for cash , I would advise an appraisal just in case you wish to draw equity after the sale, and refinance once you got the cash deal done. Hell I sell vacation homes my buyers aren't going to live in them like a home either ...but my sellers want them sold.

So much wisdom in The Emperor's New Clothes as well as a failure to admit what we can't see and/or understand.

I see buying a home without contingencies as foolish whether with or without cash.

Good post.  Cash is King now and the way the king is swaggering around it makes you wish for another price drop. 

Buyers who don't have cash have to be really careful right now if they find themselves competing for a home.  It's better to make a sound and reasonable investment over paying too much for a home just to "win" a highest bid deal.

Or, have a buyer who is completely approved with a LOAN COMMITMENT from a lender with funds to lend and they have a virtual CASH CARD with which to shop for a home.

Smart agents work with lenders who can approve with the only condition being an accepted CONTRACT OF SALE and an acceptible appraisal.

THAT is a real pre-approval.

If buyers are going up against cash offers, what about the idea of writing a letter to the seller? I've heard of this but never tried it. I do know that often, it is important to the seller that the buyer will love the house like they did.

Very entertaining post! Sounds irresponsible for agents to advise no contingencies but what's got me flummoxed is even finding live-in-the-house buyers in a position to pay cash.  Although I agree with you completely, many, if not most investors in our area are buying the same properties that appeal to first time buyers.  I would like to know how that blind squirrel is finding those all cash typical buyers. Here, I've yet to run into a first-time, live-in-the-house Buyer with cash.  Our live-in-the-house first-time buyer is much more likely to be cash-strapped and trying to squeak in with 100% USDA or VA or might have enough money to make FHA work with Seller concessions for closing costs.  They might be going head to head trying to buy the same property but rarely shall they both be in the same position with resources sufficient to pay cash.      

Interesting read... 

So, we have things set up this way - FHA - pocket listings, no competition... VA goes to investor flips, they can't take FHA loans on the 90 day rule and investors w cash get a walk thru with their favorite contractor to inspect the property prior to closing. Anyone else with some funds to close, gets a chance to bid against the lot, and usually wins. Don't advise to waive contingencies, but make sure buyer is educated and understands what they are doing. 

At the same time, there is hardly anything as nice as listing a house and bringing a buyer over and negotiating a price for them, then opening escrow - and on the MLS the next day. 

I agree with Beverly (#19).  My first-time FHA buyers don't have a good chance against cash buyers in that price range.  I don't know of any first-time or even 2nd time buyers that are purchasing with cash.  

I am working with a cash buyer (not a first-timer) and he just got out of a deal because of the inspection.  I don't know of anyone who hasn't taken advantage of an inspection.  

I rarely see cash buyers order an appraisal because they're aware of the market and most of the cash deals are really low priced. 

Great analogy John. I knew of agents that were doing this previously when the market was hot and it seems they are still in the business giving poor advice. Unless you are a bonafide contractor, don't ever give up your right to an inspection.

Having your client buy any house without an inspection will open yourself up to professional liability if it ever goes to court for any reason later.  If they don't want an inspection, document your reservations and reccomendations in writing more than once.

Well presented.  I agree with your take on agents who go too far giving financing (or not financing) advice. Haven't we learned anything yet?  Also totally agree with Lenn Harley ... now that is THE definition of a pre-approved buyer.  

Cash always has been and always will be KING when it comes to real estate.  Sellers love contracts without contingencies, and it's tough to compete with a sure thing.  However, no buyer should ever give up the right to an inspection, as that could cost them DEARLY.  I guess that's what you refer to as Buck Nekid, lol!