Why CASH Isn't Always King...

Reblogger
Real Estate Agent with Century 21 Prevete Real Estate 40RI0590108

Original content by Rob Magnotta

I've noticed an interesting trend lately. And by interesting, I mean completely and utterly frustrating.

Recently, I've been lucky enough to be working with a few "All Cash" buyers, or at least lucky in so much as their purchases weren't reliant on a bank. Yes, interest rates are ridiculously low, but you still have to qualify, which is not an easy task. The cash buyer solves this problem, and assuming they make a reasonable offer on a property, the transaction should be quick and painless, right?

Some of you may notice that I put the word "reasonable" in front of the word offer. That wasn't an accident. On a $600,000 home, I just had a buyer ask me... "Do you think they'll take $450,000?"

No. I don't. I really really don't. In fact, I don't want them to. I don't even want them to counter! I just want a nice, quick rejection. And why? Because you're offer is LUDICROUS!

Even if we want to debate the "bottom of market" that we may or may not have hit, we're pretty darn close.
And while I don't have a crystal ball, I'm going to go out on a limb and say we do NOT have another 30% drop to go. Personally, I don't think we have another 20% to go. So if my cash buyer wanted to write a low ball offer, I would have suggested $540,000, and would have prepared my buyer for the next step, which would more than likely be a counter offer. Some of you may think I should write the offer for whatever my client wants to write the offer at. And for the most part, you're right.
But where's the line? When do we put our reputation first? These are tough questions, but if you know the market you're in, and you know your client wants to write an offer that is light years away from making any sense, what's wrong with saying, "I'm sorry, but I won't submit an offer that low."

There are plenty of Trustee Sales, Monday through Friday around here. You got cash? You want to see if you can pick a home up for 70 cents on the dollar? Give it a shot. You don't need me for that.

I'm a Realtor. That means I work on commission. My TIME is king.

Comments (3)

Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

I worked with a person the other day and they said to me the property is only worth X. I was amazed. Ddid they do a zillow( often inaccurate ) search. Where was their CMA ? They were new to the area. It is almost as if every person who brushes their teeth suddenly thinks they are a dentist

Jul 24, 2010 03:44 AM
Alan Bruzee
Long & Foster Real Estate, Inc. - Rockville, MD

Sometimes deals get done when the conversation starts - even if it doesn't start "reasonable".   In our market, our offers are 60+ pages, so the buyer has to spend a lot of time filling out forms, this separates the serious from the tire kickers most of the time. 

In good markets, nobody is going to sell for a huge discount for cash.

Jul 24, 2010 03:46 AM
Don MacLean
New England Real Estate Center Inc. - Easton, MA
Realtor-Homes for Sale- Easton, Mass 02356

With all the doom and gloom around everyone is in the mind set that the bargins are outside there front door.

No work required, and they know more and better than you about everything

Silly people

Enjoy the day

Jul 24, 2010 04:15 AM