Waiving the finance contigency with a mortgage pre-approval means you cannot back out for inability to finance the property. Not all lenders are going out of business or we would all be going out of business.

"A strong pre-approval is the same as cash for the seller" ??? I think if I made that statement to my Seller it would boarder on a breech of my fiduciary. Taking the lender out of the picture is ALWAYS a good idea! And with underwriting guidelines changing daily, companies going kaput, a "Cash" deal is far superior to one with a loan. We document the ability to pay cash by actually requesting information on accounts to demonstrate the money is available. This is why Realtors are needed in a transaction. If it is not available then you need to probe further to determine is this really a "pre-approval" situation instead of a "cash" deal. Many naive Realtor/Licensees think since the Seller is being "cashed-out" it is a cash deal. Just the ability to NOT sign loan documents is a good thing!

How do you intend to document your cpacity to pay all cash to the seller? One of the advantages of having a lender involved is the 3rd party saying "buyer is approved for the amount necessary to close on this transaction." Barring hard to finance properties as stated herein by others, a strong pre-approval is the same as cash for the seller. Pre-qualified's however, may be a different story. Please see my blog comparing these for further consideration.

Greg Z

Some types of property are almost impossible to finance, or only make sense as cash purchases.
These would be: Old mobile homes, vacant, red tagged major fixer or teardown properties,. some commercial properties, Properties with haz mat issues,

If a property is in need of termite remediation, new roofing, foundation repair, it will not qualify for a high loan to value nice interest rate loan. These are also situations where cash makes a big difference.

The more difficult a property is to finance the more attractive an all cash offer is.

I agree with the others that there is not much difference between cash or a well qualified buyer on a good condition, ready to move into SFR.

A cash offer releases the seller from having to worry about financing qualifications and apraissal values. To a lot of sellers, and more towards the end of the year, time is more important. How soon can you close the deal? is their main concern.

John....

An all cash offer shows strength. No worries about property appraising and financing contingencies. In any event the seller will recieve all cash if you finance or just pay cash.

John,
I think you might save two to three percent on a house with a cash offer. Once the seller gets to closing they walk out with a cashiers check regardless of how the home was financed. The only advantage to the seller is they don't have to worry about the financing falling apart.
Michael Doyle

Personally, it affects it more in a multiple offer situation. If an all cash deal is slightly under another offer that is on the table, it may make more sense to go with the all cash offer.....especially if we can remove all contingcies in a matter of a few days. It could be a better bet for the seller.

John, I think it all depends on what you are buying and where and who is presenting the offer. When you have a cash buyer you eliminate all sorts of testy situations one biggie being the appraisal. And in his market that is a real BIGGIE for the vast majority of properties on the market. That being said I'd STILL get an appraisal as you want to make sure what your offering isn't over the market but a great Realtor should be able to supply with the same data of an appraiser. No law says you have to make the deal "contingent" ON an appraisal. You can back out of the deal during your due diligence phase.
Some areas which are still in big demand with scarce inventory might be "cash" resistant to a price decrease. Well qualified buyers with big fico scores and 30% down would have no problem with the loan except if the price can't be justified. Your Realtor will make the difference in pointing out to the Sellers the advantages of you and all that CASH!!! This could still get you a discount but more importantly make your offer more attractive over all the others!! A big negotiating point!
Now if you are "bottom" fishing I think a cash deal could get you some major discounting. Sellers with big equity in an area of rising foreclosures could benefit tremendously from cash, quick close deal! Your REALTOR needs to be a strong negotiator here and INSIST on presenting the offer to the Sellers. This could be an issue with certain agents but you may wish to insert a clause in the contract stating, "Selling agent to present all offers to Sellers in person with Listing Agent present". This will really tick off some of my more controlling brethren! So many Realtor/Licensees have known only, "fax it to me and I'll present it for you." At all costs avoid this strategy as it is the worst strategy to allow.
I always give the “selling” Realtor/Licensee the ability to present their offers but had very few take me up on my offer. These Realtor/Licensees don't have the strong skill set your cash deal demands and NEEDs!
This should set off the Trulia Voices! As Mao once said, "Let a thousand blossoms bloom!"

I have not seen a seller discount a home more because the buyer could pay cash. There is some risk involved with a buyer obtaining financing but if the contract will put more money in the sellers pocket they will likely take the risk.

I personally will advise my clients to pay more attention to the buyers with all cash offer and it does give sellers a comfort feeling that there will not be any lending problems.

However, the bottom line is still the supply and demand, how many houses are on the market and sellers motivation.

There are certainly still some very qualified buyers out there so your offer will be looked upon favorably, but probably won't get you a huge discount.

Sylvia