Currently, it's usually the buyer bringing in the difference, because it's very hard to justify a seller lowering a price when a property sold in multiple offers. An appraisal is "supposed" to be an estimate of current market value. That isn't happening. It's more like a value arbitrarily placed on a property that pleases the lender for collateral purposes. So a cash offer, not contingent on appraisal is a plus. Many non cash offers at this time are resorting to waiving appraisal, as long as the buyer is confident about the value and willing to bring in more than 20% if needed to close.
What cash does not, currently, buy you at this time - generally speaking - is a huge discount off the purchase price. There was a time when that may have been true, however it comes down to simple economics at this point. If there are 20 offers, 10 of them cash, and 10 of them terms, a seller will generally take the highest and best. Often it will be a cash offer, OVER asking price which is also over any of the terms offers. Frustrating for those of us who don't happen to have mounds of liquidity just sitting there - but that is the current state of affairs.
So having cash, alone, will not score you the deal. The downside of a cash offer, speaking as a listing agent, is that, of all types of offers, I find cash offers to be the most fickle, and most dangerous to work with. There seems to be a feeling that "Cash Talks, all others Walk"â€¦ Cash buyers often feel that, being in a power position, they can negotiate harder, be more firm, and walk away more easily. I tell my sellers, "A cash offer equals zero in your bank account if it never closes". What is even more important than cash, is to demonstrate to the seller that you are serious, professional, and absolutely committed to the purchase.
A seller takes a risk each time they accept a cash (or any) offer, over other multiple offers. If that escrow fails, the other offers are often no longer there. A stigma is placed on the property that makes round two or round three with escrow more difficult to attract the highest offer. There may be inspections that have taken place that have to be disclosed to the next buyer. Sometimes these inspections are not well done, are completely bogus, or meaningless - still, even if you think the inspector was a whack job, you still have to disclose it to the next buyer by law (in California). It's risky for a seller to take a non-committed offer. It can cost them thousands of dollars in lost opportunity.
As a cash offer - or any offer - if you are in a position to narrow your window of contingencies - remove any contingencies upfront that you are already comfortable with, and put your close of escrow date as soon as possible -( meaning - with a cash offer, there should be no reason you cannot complete inspections, transfer money and close within 10-12 days. Asking for a 30 day escrow on a cash offer makes a seller wonder what you need the extra time for)â€¦ anything that builds a picture of commitment to closing, will help substantially in getting your offer accepted.
Finally, being represented by a true professional who presents the offer in a very clean, professional manner (no hand written documents, i's dotted, t's crossedâ€¦attention to detailâ€¦professional communication and courtesies)â€¦can, and often does make the difference in which offer gets accepted. I can't stress that enough - from both experience as a listing agent, and as a buyers agent. As a listing agent, I will heartily recommend a very professional offer and reputable agent over other offers in the same range. As a buyers agent, I cannot tell you how many times I have had an offer accepted, or had a lower than the top offer given 1st back up position, or an opportunity to match the highest offer, because the agent called me personally, saying, "the seller REALLY wants to work with you and your peopleâ€¦.what can you do?". It worksâ€¦professionalism is the key.
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Thanks for contacting us here on Trulia.
Paying cash will definitely give you a little more negotiating power than if you were getting a loan, but it is still a seller's market.
I would be happy to send you a list of available properties in the Hollywood Hills, although there aren't many foreclosures in that area these days.
Feel free to contact me at (310) 717-1321 or JamieTian@RodeoRE.com with more information about what you are searching for (price range, number of bedrooms, etc.). I would also be happy to answer any other questions you might have about the home-buying process.
I would do a SEARCH FOR AGENT in Trulia, review them for that area - Then look for those that have recommendations from real clients.
Pick a couple of those that have the best profiles and references, then call them to chat, or set an appointment to speak with them.
A good old fashioned phone call will help you get a feel for that person, and whether you would make a good match for your Real Estate process.
Call or email for a free pre-approval and free credit report.
We can do: FHA, Conventional, USDA, VA, HARP, Interest Only, Home Equity, Fixed, and Variable. Find out which product is right for you by calling Brad at (630) 639-1081.
Sr. Loan Officer
Toll Free: (855) 415-5626 ext. 5734
A seller will look at offers as they come in, and put them in order of preference, based on price and terms. If the seller is interested in a quick close, an all cash offer may have an advantage over conventionally financed offers. If the bidding goes above appraisable value, the all cash buyer May also have an advantage there.
All the best,
I'm located in Los Feliz and work throughout the Hollywood Hills areas. As many have commented here, cash buyers may have an advantage in negotiating though it is not a slam dunk. Please contact me to discuss your options.
I'm talking $150,000 homes that were in great condition... and then getting in a $20,000 offer.
I am known for selling many distressed properties and would be happy to assist you if you wanted. Please contact me directly so we can compare notes and see if it would be a good fit.
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills South
166 N. Canon Dr, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-278-4934 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - BRE: 01352771
Sellers Buyers Investors Leasing Consulting
In the lasted few years all cash buyers had a lot of purchasing power. In 2013 the West Los Angeles market has changed the market is not stagnant with properties staying on the market for any period of time. There is a drastic decrease in short sales and foreclosures. Mortgage interest rates are around 4.5% and buyers confidence in the market has taken off. The West Side has seen more buyer demand than housing supply and prices have increased. It has been my experience that all cash buyers are now competing with qualified mortgage buyers. All cash buyers now have to compete with multiple offers that are going over asking price.
All cash buyers are looking for a deal. SELLERS ARE LOOKING FOR THE HIGHEST PRICES AND NOT INFLUENCES BY A ALL CASH BUYERS WHO'S BID IS LESS THAN QUALIFIED MORTGAGE BUYER WILLING TO PAY HIGHER PRICE FOR HOME.
- All cash buyer $500k 2 week escrow
- Qualified mortgage buyer $530K 5 week escrow.
Seller willing to wait addition 3 week for $30,000.00 more.
There are still foreclosure properties on the market maybe a little less than standard sales. The competition is the same. All cash buyers competing against qualified mortgage buyers. Hopefully, this information informative. Any questions please call.
Gail Mercedes Cole
West L.A. Estates: westlaestates.com
8700 Reseda Blvd., Suite 213-B
Northridge, California 91324
(818) 967-9626 mobile
(818) 979-0226 fax
Reply To: email@example.com,
Sellers will be looking at several factors ie: the bottom line, the Seller's NET or Cash Out at close of escrow, the escrow period...most of the time, the shorter the better, however, I have had escrows where the Seller requested a longer escrow period, and contingency periods.
Contingency periods need to be shortened too. With a cash offer, there is no loan contingency, however, there an appraisal contingency which with a cash offer, may or may not be necessary. The Inspection Contingency is typically 17 days, however with a cash offer, it needs to be shortened to 10 days or less.
Making an offer "as-is" (except for local regulations pertaining Government Retrofit ie: water conservation, smoke detectors, seismic gas shut off valve, etc.) is also a great idea. The Seller won't have to do anything to the property or give any credits to the Buyer through escrow. Seller's love this.
The Seller will choose the best Buyer's Offer and Terms and with the highest ability to close escrow. A good percentage of the time the Seller will take all cash over a Buyer with a loan. Loan sometimes may take extended time to close, sometimes up to 45 days or greater.
Most of the foreclosure homes on the market are the same as standard sales. They are priced appropriately and at market value. Foreclosures are sold "AS-IS" without warranties, credits or repairs. So be prepared to do some renovations and cover the costs once you close escrow.
I have sold over 400 foreclosures and know the process well.
I hope this helps.
Feel free to call or e-mail with any questions.
All the best,
Steven Patrick Kyle
Agent, Realtor/Broker & Architect
Keller Williams Realty-Hollywood Hills
I look forward to speaking with you soon!
Have a great day,
Heather Paul, Broker Associate, Realtor
But anything above that; it is not that important: At the end of the Escrow, everyone will have their money and no one will remember you bringing in a suitcase.
If you have oodles of money, go ahead.
But if that is limited, you'd probably be better off put a big Down Payment and financing the rest:
This is a question for your financial advisor and your tax man.