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Is Cash "Always KING" When Buying Real Estate?

By
Real Estate Broker/Owner with 1 Month Realty 49855-090

Box of Cash

Is Cash "Always KING" When Buying Real Estate?

A few weeks ago I listed a house for sale in Kenosha, Wisconsin.

On Day 1 we had a huge onslaught of showings.  My cell phone was dinging throughout the day alerting me of the fact that another agent had been confirmed through our FlexMLS ShowingTime system. Agents were texting, calling and emailing me throughout the day asking questions about best terms, etc. and advised their buyer was considering putting in an offer but wanted a quick answer/response from the seller today, if that was even possible.

My seller was on the road and unable to have offers presented until later that evening and so we set a time to review all offers for 8 pm that night. 

Lucky for me I was able to walk 3 different buyers through the house.

     * One was an investor client (conventional buyer) who has bought a few homes with me in the past 2 years 

     * One was a Cash Buyer - also an investor client who I've worked with numerous times over the past 30 years

     * One was another agent's client (conventional buyer).  Mid-afternoon a REALTOR called my office to advise me about his very interested buyer who was in a panic, afraid she might lose out on an opportunity to see this house and possibly offer on it today. She told him she knew it would not last more than a day!  Unfortunately, the agent was unable to show her the house because his wife was literally in labor and about to deliver their first child. I told him I would be happy to show the house to his buyer.  And I did. 

Offers had started coming in!  One right after the other.  In fact, of the 3 prospective buyers I showed the house to, all three decided they liked the house and wanted to put in an offer! 

I confidentially discussed offer details and terms with each of my individual buyers ... and since I was now in a position of writing with more than one buyer that day I advised each one to make their offer "their" highest and best that they were comfortable (able and willing) to give.  I disclosed to all 3 buyers that numerous offers were already received with more on the way, and that submission of all offers to the seller would be made later that night. 

Each buyer submitted their best bid and terms for me to put in writing for them and to sign electronically later in the afternoon.

I did my best to explain to my Cash buyer about the numerous offers coming in and after he thought about all the information I shared he then said ... "yeah, well cash is king!"  Then asked me to go ahead and write up his non-contingent offer with a quick close and hefty earnest money deposit. Unfortunate for him, all (and I mean literally ALL) the other buyers saw and recognized the location, condition and price of the house was very fair, competitive, and within their reach, and thus brought forth their best offers to the table (some with and some without contingencies). The offers were all above asking price.  Except one! Yeah, you probably already know who it was. And guess what?  Cash was NOT KING!

After presenting each offer in the order they were received, my Seller made his decision on which offer would be his Best Choice.  By the way, he did not accept the highest offer but instead made his decision based upon what were the best terms for him, the seller -- fair price, acceptable earnest money deposit, convenient closing date, very few contingencies, the type of loan, interest rate,  lending institution/loan officer, downpayment ... and that Meeting of the Minds! 

Bottom Line: The Seller's Net Proceeds at Closing.

Offer Accepted 

It's been said, Cash is King ... Until it's not!  

Thinking of Buying or Selling?  Let's Chat!  This house was listed and SOLD within 24 hours!  I would love to help you with all your Real Estate Needs! 

 

 

John Pusa
Glendale, CA

Hello Diana Dahlberg congratulations for receiving multiple offers on your listing. Cash offer was not the king in this case. Generally, cash is not always the king when buying a home.

Sep 28, 2023 08:19 PM
Diana Dahlberg

John Pusa Thank you! I appreciate your comments and agree ... "generally" cash is not always the king!

Sep 29, 2023 10:05 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

I find often times when there is no loan, no appraisal contingency and there are proof of funds Cash is King, but not all the time like in your case, Endre

Sep 28, 2023 10:12 PM
Diana Dahlberg

Endre Barath, Jr. Tis true!  Every sale has its own merits and the seller needs to review and consider all the options!

Sep 29, 2023 10:06 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

p.s. I am with John Pusa  congratulations on the multiple offers and the bottom line the winner was the seller thanks to you, Endre

Sep 28, 2023 10:13 PM
Sham Reddy CRS
Howard Hanna RE Services, Dayton, OH - Dayton, OH
CRS

Way to Diana, you did an awesome and professional job!!

Seller decision based upon what were the best terms for him, -- fair price, acceptable earnest money deposit, convenient closing date, very few contingencies, the type of loan, interest rate,  lending institution/loan officer, downpayment ... and that Meeting of the Minds! 

Sep 29, 2023 04:35 AM
Diana Dahlberg

Sham Reddy CRS Appreciate your compliment and believe 100% that every deal has to be won on it's own merits!

Sep 29, 2023 10:08 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Good morning, Diana... I had sellers who made the exact same decision just this past weekend. We had a slightly higher offer of all cash. But the one we took met some other requirements much better. I often tell my clients it's not just about the highest price or cash.

Sep 29, 2023 05:43 AM
Diana Dahlberg

Exactly and well said Nina Hollander, Broker ... it's all about the terms!  Cash is nice, but the bottom line -- net proceeds speaks louder in many cases!

Sep 29, 2023 10:26 AM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Hello Diana - congratulations on the positive response of this Kenosha Wisconsin real estate listing.   It's not easy to be a seller (or a buyer) in a competitive situation as different scenarios can make the process confusing.  Good luck with the transaction as it proceeds to a successful closing.

Sep 29, 2023 06:24 AM
Michael Jacobs

Diana Dahlberg - a life in real estate is an opportunity to see lots of things happening.  👶🏠$$$

Sep 29, 2023 10:59 AM
Diana Dahlberg

Thanks for your encouragement Michael Jacobs ... I have to share another piece of good info:  That Realtor whose wife was in labor at the time of the transaction?  Well she had a healthy baby boy and that same buyer I took through the house was so happy with how professional I was during the sale of my property and she liked me alot ... then she asked her Realtor if he could contact me again to take her through another property (not my listing) that came on the market.  I did and the good news?  She wrote an offer, got it accepted, and I will not be getting a Referral Fee!  All things work together for the good!!!

Sep 29, 2023 10:30 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Thank you for letting us know about this situation where cash did not win out in multiple bids! It can happen, I've had it happen.....good luck to a smooth closing!

Sep 29, 2023 06:48 AM
Diana Dahlberg

Thanks Dorie Dillard Austin TX ... I am looking forward to a smooth closing!  So far so good.  Thank you for your encouragement!  That is probably one of the best things I love about ActiveRain and all our awesome partners!

Sep 29, 2023 10:35 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Diana, I think most often it is, but some sellers don't care about a quick close, and maybe a financed offer yields more in the long run.

Sep 29, 2023 10:42 AM
Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
The Grit and Gratitude Agent

First congratulations on the multiple offers and cash is king with as you saw limitations. Low ball cash offers below confirmed market price often fail to win the property.

Sep 29, 2023 11:33 AM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Always appreciate your comments Leanne Smith ... In this particular case the cash buyer did not low ball, however, he was far below the majority and the seller was then left with multiple choices.  And he won!  Have a fabulous weekend! 😉

Sep 29, 2023 11:42 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

NOTHING is ever set in stone, Diana. Those who are stuck on the Cash is King mindset may become a court jester after the sellers decide what is truly best for them! 

Oct 02, 2023 09:58 AM
Diana Dahlberg

Wanda Kubat-Nerdin - Wanda Can! you got that right!  Each transaction has its merits ... and the seller needs to make the final decision (with a little help from us)... Hope you have a great week!

Oct 02, 2023 10:01 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Diana Dahlberg ,

I'm so bummed I missed your Zoom presentation yesterday! I had a photo shoot that I have coming on today! I know it was good and wish I could have attended!

Oct 11, 2023 05:49 AM
Diana Dahlberg

It was fun and the hour went by too fast!  Miss you too Dorie Dillard Austin TX -- Hope your photo shoot was a good one!  Wishing you success in the new upcoming listing!

Oct 11, 2023 07:39 AM
Patricia Feager, ABR,CRS,GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Diana Dahlberg - No doubt about it. you have a great listing and all three who submitted offers knew it! With your wise counseling, you guided your clients well! Solid offers usually wins. Cash may be king, but doesn't always stack up to what the Sellers want!

Way to go, Diana! I wish you and your sellers all the very best!!!

Nov 06, 2023 08:24 AM
Diana Dahlberg

Just closed on this last week!  It was wonderful ... both buyer and seller were repeat clients and such a pleasure to work with both of them again Patricia Feager, MBA, CRS, GRI,MRP 

Nov 06, 2023 11:15 AM