This is a CASH OFFER, (so you're supposed to pay attention!)

By
Real Estate Agent with Residential, Investment properties, rehab projects, property management, luxury homes, new construction!

Seems to be a big push lately for the CASH OFFER.

We all know cash is king...we've heard it all that before, right?

Well, what cash ISN'T in the home buying process is OMNIPOTENT.

What does cash do for you in an offer? 

1. It shows the seller/investor/lender your ablility to close without the contraints of lender requirements.

2. It shows the seller/investor/lender your ability to close quickly, because as before, there are no lender requirements that have to be met.

3. It gives you the ability to craft a very strong offer for negotiation if the price and other terms are around market value.

 

What does a cash offer NOT do for you?

1. It does not give you a coupon or discount to offer 50 cents on the dollar during the purchase process. 

2. It does not move you to the head of the line of other offers that are significantly better than yours.

3. It does not get special handling or treatment by the listing agent, seller, or in the case of a short sale, the seller's lender.

 

What makes a GOOD cash offer?

1. You have an offer in the ball park of market value. 

2. Your offer is clean with fewer contingencies, seller contributions, required repairs, repair allowances.  Remember, a $100,000 offer is NOT a $100,000 offer if you then as for 6% in seller contribution to closing costs and $10,000 in required repairs prior to closing.

3. You have the PROOF of funds that show you have this CASH available to close.  This doesn't mean that it's in your 401K, it's at your Grandma's house in her mattress or you have a note saying "Trust me, I GOT this".  It means that you have written proof, from a valid source, that you have LIQUID funds in the amount needed to close...a bank statement from 18 months ago doesn't qualify either as you need it to be CURRENT and show as LIQUID (IE, it's in a savings account or a checking account ready to be spent).

 

So while we love the cash offer, it sounds impressive, it's easy to close with and it makes for an easier buy process, don't think that if you drop the term CASH offer on your fax cover sheet, email subject or in your voicemail that a listing agent is going to stop, buy you dinner and wash your feet in thanks...

When you write a cash offer, take it seriously...write it clean, strong, concise and well documented and you'll find THAT speaks a lot louder than "I'm sending you a C-A-S-H  O-F-F-E-R in a few minutes".

Comments (2)

Emily Read
Salt Lake City, UT

It does not give you a coupon or discount to offer 50 cents on the dollar during the purchase process.

Lol - love it!! Thanks for sharing!!

Apr 13, 2011 07:15 AM
Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

Cash offers are great but they also have to be realistic. A seller might be willing to part with a small percentage, as in single digit or a bit more, in exchange for an all cash offer and that's where the power of cash comes in.

Apr 13, 2011 07:23 AM