Michelle:

First of all, your Realtor should run the latest comps and advise you based on these numbers. Cash is nice, but I've never seen it speed up or influence a bank on a short sale.

However, there are a few things you need to know about short sales that may help in your decision making process:

1. Many short sales listing agents keep short sales listings active even after they have received a number of offers. I won’t go into the reasons here – just know that many do.
2. If you bid over the cash offer, they may very well go back to the cash offer and try to get them to beat your new offer. They may also use both offers to leverage a new, higher offer from some other party. That would put you in a subservient position.
3. All of this may be mute unless the listing agent knows what they are doing and manages to secure a settlement from the bank(s). Many short sales fail to close.
4. Once the bank(s) settles, they may set their own price higher than what you are offering, and unless you come up to their price, they won’t deal.

As an experienced Broker, I prefer a solid lender committment rather than cash, unless the cash is in escrow. Who's to say the assurance of cash is real at time of closing? To verify the ability to buy, nothing beats a solid lendered saying, "Yes, I've checked this borrower carefully." When the cetified funds show up at closing, it's all cash.

Craig Cardella, Broker

We agree with all the other advice but notice that no one mentioned to be sure that you include a pre-approval letter for amount you wish to borrow on the house. Cash trumps for an equal bid so yours will need to be higher, but be sure that you do not pay more than the house is worth.

We do NOT agree that you should be willing to purchase the house without inspections. Buying "as is" is okay as long as you can have a good licensed professional (preferably with high limit Errors and Omissions insurance) carefully inspect the house. Then if the house has structural problems or needs a new roof, for example, you could back out of the purchase.

Be sure that you are working with a Realtor to help you with your offer. Short sales can be tricky.

Your local realtor can best advise you...I would have them pull comps and to have a conversation wsith the listing agent.

The sheer amount you are putting down puts your offer very close to that of a all cash offer. What dictates whose offer is best from there is price then terms. In terms it is things such as closing in 30 days, no home inspection or mortgage contingincies and not asking the seller to fix anything. Do all of your homework before making an offer so teh contract is clean as possible. Good luck with your offer.

Michelle,
My experience is that cash is KING and all other financing options fall into second place as long as it is close to the asking price. I do not want to discourage you but it is hard to compete with an all cash offer. I have been losing deals because multiple all cash offers over rid my buyers that had financing unless you over bid. Just Info.....

My first question would be "WHO told you the bank has a 750 cash offer?" It appears to me that this agent isn't representing their client very well. As a buyers agent I would be livid if I found out my agent allowed the listing agent to advertise my bid! Think about it. How would you feel if your bid gets published out there just so the agent can get more money and a higher offer? Sounds like that's whats going to happen to me.

That said, the banks I've been dealing with on short sales don't seem to put a lot of weight on cash unless we need a quick close. If the lender has an auction date coming up soon, then cash matters. Find out the auction date if there is one. My question would be simple. How much is the home worth? Your agent should PROVIDE you with copies of comps in the area along with a list of the differences between this house and the comps, and the costs for those differences so you can a TRUE value of this properties value. Now if you tell me you are bidding ona a 1,000,000 house then I would ask you "How bad do you want it?" Get the banks attention by giving them a considerable amount over, don't play the thousand dollar game and walk away from a house with a lot of built in equity that you really want! Ask your agent, if they are an experienced Short Sale agent, how much over she recommends you go to get the banks attention. And because of this situation, I would MAKE certain that I got something in writing that states my information is to remain confidential or tomorrow we will be seeing your bid here! Good luck!

Hi Michelle,

Hi Michelle,
You didn't say what the current list price is for the home in question so I'll make the assumption it is $750,000. Also you didn't say whether the lender has approved the sale and if so, at what price. Each lender is different, but having done many short sales myself, listing and selling, I will tell you that the lenders want to get the most money for the property as they can. So an offer with a loan can beat out an all cash offer if it is at the list price or higher. Also other terms can sway the decision too....how quick can you remove your contingencies and close? Are you willing to purchase the property as-is? Are you asking for any credits back? Are you including a pre-approval letter and verification of available funds with your offer? Your agent should have a conversation with the listing agent to ask what it will take for your offer to be accepted over the cash offer.
How much over the price depends on several factors - first how badly do you want the home? Will you be happy if you pay over the list price for the home? How much over? And since you are getting a loan, will the home appraise at the list price or higher?

Good luck!