WHAT YOU NEED TO KNOW ABOUT CASH
1. CASH IS GOOD WHEN GOING UP AGAINST OTHER OFFERS BUT ONLY WHEN IT IS THE BEST OFFER
2. MOST SELLERS DON'T UNDERSTAND THE DIFFERENCE UNLESS THE REALTOR EXPLAINS IT TO THEM
3. IT WILL NOT EXPEDITE A SHORT SALE APPROVAL ONE BIT, THE BANK COULD CARE LESS
4. IF THE CONDITION OF THE HOME IS TURN-KEY AN FHA FULL PRICE OFFER WILL BEAT YOU
5. IF THE LISTING AGENT IS ALREADY DOUBLE ENDING THE DEAL WITH A POCKET BUYER YOU HAVE NO CHANCE
What I must explain is that most sellers want to net as much money as possible from a sale. With that said if
the subject property needs many lender required repairs, CASH will take first position when the difference in net
proceeds is small in comparison to repairing the property. For example if it will cost $20,000 to repair a property
but only give a seller $5000 more in net proceeds the seller will most often take the cash offer.
In a property that will qualify for Conventional financing the highest amount I feel the sellers are willing to lose
to take a cash offer is 10% off fair market or the highest offer. In most cases I have seen the seller accept
offers that are within 5% off fair market or the highest offer.
In the case of purchasing homes that are being flipped you will need to look at what the property was recently
purchased for and calculate the cost of the repairs made and then finally determine the investors net
proceeds after all expenses. In my market I submitted a full price offer on a listing of $450,000 you would
think that my client would have been a proud homeowner able to move in on the 16th day after
acceptance..........well that's not what happened. Instead the Investor/Seller called me to ask what my clients
final offer was. I calculated the expenses including the investors costs to purchase the property and with my
clients offer at $450k the investor would net $29,000 apparently this was not enough profit for 3 weeks work
for this investor. The home ended up selling to someone with 20% down and an offer at $480,000. In my
opinion I certainly agree with the investor/seller I would mind waiting an extra 20 days to make another
In the end yes CASH is still strong but your offer has to meet the sellers net proceeds expectations!
GOOD LUCK TO ALL YOU CASH RICH PEOPLE OUT THERE!