With my buyers we strive for an immediate offer as soon as possible after the home hits the market. We're hoping to secure the contract before it becomes a multiple offer scenario. When this works, my cash buyers can get some pretty phenomenal deals.
Despite our speedy response time, nearly all of our firm's offers end in multiple offer scenarios though -- so eventually the buyer is forced to present a highest and best offer. Cash buyers will generally be at an advantage when competing against similarly priced financed offers, however I have seen banks take a chance on financed offers that were slightly higher.
I could go on and on about strategy for cash buyers, however it can be a little different for each property. Reach out if you would like me to elaborate.
The only real advantage a cash buyer has over a strong conventional buyer (20% or more down, with a pre-approval leeter from a lender stating that a tri-merged credit report has been pulled, assests and income checked and subject only to the properties appriasing) is the their ability to close in half the time. If you don't structure your offer to close within 2-4 weeks you lose some of the leverage you have.
While the Sellers may not be prepared to close this quickly the fact that you're offering to carrys a lot of weight.
Example: The owner of a property dies. The children inherit it. The mortgage is paid off. The house needs a bit of work. It goes on the market at $300,000. A conventional buyer comes along and offers $290,000 . . . contingent on financing. A cash buyer comes along and offers $250,000. The children just want to sell. They don't want to worry about whether the financing will fall through. The cash buyer likely can get the better deal.
Example: The owner bought the property in 2001 for $270,000. They put it on the market today for $300,000. They've paid down the mortgage a bit, but they really can't afford to bring any money to closing. They need to sell for as close to $300,000 as possible. A conventional buyer comes along and offers $290,000 . . . contingent on financing. A cash buyer comes along and offers $250,000. If the sellers accept the cash offer, they'd probably have to bring money to closing. So they're going to choose the $290,000 offer.
Especially in the current market--the focus of your question--you have to know how low the sellers can afford to go. Never pay more than a house is worth, of course. And certainly considering offering less. Just recognize that some owners aren't in a position to accept less . . . even with an all-cash offer.
Hope that helps.
But in regards to real estate, many cash buyers assume they can underbid the asking price by 30% or greater.
It doesn't fly. Hopefully, you understand that a generic question like yours can't be applied to the peculiarities of all properties, but generally the two biggest advantages are that a cash buyer will win a bidding war when the other offers are financing contingent, and the second one is the ability to walk into the closing room with a metal samsonite chained to your wrist, flip it open, and say these seven lucky words, "Count it and give me the keys".
And that, makes you one bad mutha. Non-cash buyers can only dream of such bravado.
there is a significantly lower chance the deal will fall apart and the deal can definitely close faster.