Cash Buyers and Real Estate Deals - Fact and Fiction
This is a reblog from my friend Melissa Z out in California concerning the cash buyer and the reality of it all! This applies to CA as well as SD! The fable of the cash seller getting a home for pennies on the dollar is generally just that a fable! Banks with foreclosures and short-sales generally will wait to collect a higher amount so they have less of a short on the note. All loans are cash at closing you see!
Sometimes the truth is not what the buyer of real estate wants to hear. But, real estate agents do not earn money because they lie, cheat, and steal. They earn because they know the market, and they know their jobs.
Just because that cash is burning a hole in your pocket and you want a screamin’ deal on a piece of real estate, doesn’t mean that the seller is gonna accept your offer. Right now the real estate market is ripe with cash buyers, many who are looking for the deal of the century.
Homes listed at current market value (which is admittedly low right now in San Diego and Riverside County) are receiving cash offers for cents on the dollar. Often times, cash buyers feel that because of the very nature that the offer is cash (a.k.a. cash is king), the offer will be more favorably received than higher offers from buyers who are obtaining a loan.
Interestingly, when it comes to short sales and REOs (bank foreclosures), most of the lenders are looking to recoup the most money that they can—even if they have to wait for the deal to close.
Unfortunately, arguments such as “I can close in three days” do not have lots of weight, since it often takes a month to obtain a short sale approval or a few weeks to put together the necessary paperwork in order to close anyhow.
The common bank response to the cash buyer argument is that the bank is going to receive cash at the end of the day no matter what. And, that’s true. Once the buyer obtains the loan, the bank will receive the buyer’s cash. Yes, the bank had to wait. But, if you were going to get a full price offer, you would probably wait, too.
The amazing opportunity for cash buyers comes with properties for which loans cannot be obtained. That is, properties that require a fair amount of repairs and then, after rehab, can be resold for a profit. So, if your cash is burning a hole in your pocket and if you are looking for a smokin’ deal, contact one of the buyer specialists at Broadpoint Properties, and we can turn you onto a bunch of great properties that meet your specifications.
Melissa Zavala
BROKER/REALTOR® ● DRE #01324959Search San Diego County Homes For Sale | Search Riverside County Homes For Sale
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