nattaeng, Home Buyer in Los Angeles, CA

How much negotiating power will paying cash give me?

Asked by nattaeng, Los Angeles, CA Thu Jul 18, 2013

I'm looking for a home in Hollywood Hills and particularly interested in foreclosure home. I'm new to town and don't know where to find agent that can show me foreclosure homes.

Help the community by answering this question:


We're in a very interesting marketplace here. There is more cash, currently in this market than I have seen in my 26+ years in this business. Cash is a great tool to gain advantage in a real estate transaction, for a few obvious, and not so obvious reasons. First, the lending situation currently can be tricky, frustrating, and often impossible unless one has stellar credit, a very clean and well documented file. The level of documentation, and ridiculousness that goes with it, currently can be overwhelming and cause great delays, or sometimes derail an entire transaction. So a seller (and listing agent) likes cash, in order to avoid such things. Also appraisals are reaching a level where they are so rule bound and restrictive that regularly we see low, to very low appraisals which can derail an escrow if the seller is not willing to lower the price, or the buyer is not willing to bring in the difference.

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"… 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)… 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 crossed…attention to detail…professional communication and courtesies)…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 people….what can you do?". It works…professionalism is the key.
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1 vote Thank Flag Link Fri Jul 19, 2013

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 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.


Jamie Tian
Rodeo Realty
(310) 717-1321
DRE #01920120
Web Reference:
1 vote Thank Flag Link Thu Jul 18, 2013
If the property just went on the market you probably wont have much negotiations with an all cash offer , however if the property has been on the market a while & the seller is motivated ,you will have a better chance of a discount for cash . There are very little bank owned homes for sale on the market today ,most sold by the end of 2012 . You can look on Trulia in the area that you are looking at & find a few agent to work with, send them an email or give them a call to interview them to work with you . Good Luck !!
0 votes Thank Flag Link Sat Oct 26, 2013
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.
0 votes Thank Flag Link Fri Oct 25, 2013
Whether the money comes from you or the lender, it's still worth the same. Most sellers wont' give much of a discount.

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.

Brad Neumann
Sr. Loan Officer
Toll Free: (855) 415-5626 ext. 5734
0 votes Thank Flag Link Fri Oct 25, 2013
I deal with lots of cash offer clients from asia. Yes, you have advantage over other offers with loans, closing time, and sellers tend to respond to cash buyers very well. Hope this helps
0 votes Thank Flag Link Fri Oct 18, 2013
With Foreclosures, in general, they are just looking at their bottom line NET. Too many people think that foreclosures are the "best deals". It is just not that way anymore, in my opinion.
0 votes Thank Flag Link Thu Oct 3, 2013

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,

0 votes Thank Flag Link Wed Oct 2, 2013
Paying cash gives you no leverage today as it did in past. That being said collaterals like your dog or loved ones can be negotiated for leverage
0 votes Thank Flag Link Wed Oct 2, 2013
Cash is no longer the "king" it used to be. There are many more of you (cash buyers) than you'd think. Your interest in a foreclosure will automatically place you in a position of "bidding," so your offer will have to be competitive.
0 votes Thank Flag Link Sun Aug 25, 2013
Being a cash buyer will not put you in a league by yourself. Half the offers to purchase are from cash buyers, you will be one of many. Getting a head start on listings before or as soon as they hit the market will put you in a better position.
0 votes Thank Flag Link Sun Aug 25, 2013
Hi Nattaeng,

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.
0 votes Thank Flag Link Thu Aug 22, 2013
Cash gives you some power, but don't over estimate the power. I have had investors who were buying in cash offer such low ball offers on homes that it was a downright insult to the industry/owner.

I'm talking $150,000 homes that were in great condition... and then getting in a $20,000 offer.
0 votes Thank Flag Link Wed Aug 21, 2013
It all depends on your price point. If it is good property, the chance of you being the only one interested is small and if you are looking at foreclosure homes, you will be competing with a lot of investors. The market here in Los Angeles has been on fire for a while now and there are many investors out there that are also All Cash and are hunting like hawks.

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.

Thank you.
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 - - BRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes Thank Flag Link Tue Aug 20, 2013
Cash is King and carries a lot of power when submitting an offer. If you are in a multiple offer situation, the seller needs to look at the time frame you are willing to close, the price offered and if there are any contingencies. If a buyer comes in at a higher price with a loan, the seller could lean toward that direction. I have had buyers that pay cash come in with a real low ball offer and end up losing the deal. In our area, cash investors are not scarce. So be careful, you may not be the only buyer bidding on a property that is paying cash!
0 votes Thank Flag Link Wed Aug 14, 2013
But i believe he is asking about foreclosure deals.
Flag Thu Oct 3, 2013
It's actually hard to find them now that the market has changed. Everyone likes cash in a transaction. In order to begin working with a Realtor you must be willing to form a working relationship which includes full disclosure and a commitment by way of Buyer Broker contracts.
0 votes Thank Flag Link Sun Jul 21, 2013
In my area & most places it certainly should make a difference for certain properties(those that have been sitting around especially. The savings can be anywhere from 5-25+%.
0 votes Thank Flag Link Sat Jul 20, 2013

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 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
EXP Realty
West L.A. Estates:
0 votes Thank Flag Link Sat Jul 20, 2013
Cash is always king, however, in today's market you are not alone. Work with a qualified agent they will steer you right.
0 votes Thank Flag Link Fri Jul 19, 2013
"Cash is King." There is more power than a loan financed buyer's offer. REOs are more prone to work with a cash offer. There's not much impact in pre-foreclosure and short sales. Standard sales will depend on seller's motivation alone.
0 votes Thank Flag Link Fri Jul 19, 2013
If you work with the right agent, it will make the world of difference. I just got my clients an unheard of deal, and I was able to utilize my skills because of the simple fact that they were paying cash. I have the ability to work the deals, but having a cash buyer lets me bring out the best in deals. If you're looking for something sweet, please let me help you make it happen! I love what I do, that's why I do it well.

Caroline Harabedian
RE-Search Concept
8700 Reseda Blvd., Suite 213-B
Northridge, California 91324
(818) 967-9626 mobile
(818) 979-0226 fax
Reply To:,
0 votes Thank Flag Link Fri Jul 19, 2013
It all depends on what the Seller wants. In this market, where inventory is low and it is a Seller's market, the Seller is typically looking for the Buyer with highest and best offer and terms, and sometimes, it is all CASH. However, keep in mind, most properties have been selling over asking price with multiple offers.

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,

(323) 819-4760
0 votes Thank Flag Link Thu Jul 18, 2013
I could write about many true story experiences and paragraphs on this question. In short, in a foreclosure, as you know, we negotiate with the Seller's bank. Banks are tough negotiators and sometimes do not negotiate at all. Cash remains king however, and is attractive to any Seller, Bank or otherwise and gives you, if not negotiating power, a top position when purchasing almost all of the time.
Steven Patrick Kyle
Agent, Realtor/Broker & Architect
DRE 01386935
Keller Williams Realty-Hollywood Hills
0 votes Thank Flag Link Thu Jul 18, 2013
Hello Nattaeng, I would focus on contacting one of the pro agents here on Trulia. You will definitely have the advantage with paying cash, cash is always king and will beat out most other offers with a mortgage. What is your price range and how many bedrooms and baths do you desire? If you would like to call me, I am an exclusive buyers agent and would love to show you some properties.

I look forward to speaking with you soon!

Have a great day,
Heather Paul, Broker Associate, Realtor
Coldwell Banker
0 votes Thank Flag Link Thu Jul 18, 2013
Intero is the company I work for and we are a great one. Here is a link to check out an office near you. Hope it is of some help!
0 votes Thank Flag Link Thu Jul 18, 2013
If you're talking about "affordable" homes; it will help.
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.
0 votes Thank Flag Link Thu Jul 18, 2013
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