I wouldn't say there is really a "discount" or an "average" for cash buyers to expect off a home. It all depends on the situation, there could be multiple offers on one home and you may have to offer more for the home based on the value. The seller could recently just dropped the price and is not willing to look at anything 5-10% off the current list price and in that situation your offer may have to sit with the seller for 30-45 days until they are willing to negotiate with you and you'll have to hope another buyer doesn't swoop in and offer more. There are VERY many variables that affect this situation and in real estate no two deals are the same.
I would say you have a stronger chance and look much more attractive when offering cash to a seller. But beware if you're in a multiple offer situation and a buyer that is financing the home offers more you'll most likely not be the winning bidder. One of my buyer's offered $67k on a $79k listed home last week, cash offer, 10 day close, no inspection, and the seller went with a higher financing offer and rejected her offer right away. In todays world of financing restrictions getting tighter and two pre-approvals seller's have a little more confidence in taking a financed offer over a cash buyer.
Please let me know if you have additional questions, I am always happy to help!
Thanks - Hillary Slama
Metropolitan Home Team of Re/Max Results
Cash is most valuable on properties that need to close in under 3 weeks or would be very difficult to finance due to condition or the situation (some condo buildings are almost impossible to finance right now) and far less of a leverage tool on everything else.
I used to be a rather large discount, but not anymore.
Right now, we have bidding wars going on in FL.
Over asking price too.
One REO agent told me he had 71 offer after 4 days on the market.
The property was facing a gated entrance (no view)...
I noticed that, if the financing offer is better by 15K, the bank might take that over cash...
It's one of those "class war" things - to let a normal person (like the asset manager) buy, not an investor.
Irina Karan, CDPE
Beachfront Realty, Inc.
MLS stats show that most listings sell within 90-93% of asking price.
I have been doing the Bank Owned real estate business for years. I have been in direct contact with Asset Managers at these banks, I have talked with them on phone, and I have shared emails back and forth. And thru all of my work with dealing thru a Bank Owned negotiated offer, CASH is always King. Banks want to unload their inventory, so when an Asset Manger sees a Cash Offer and a Conventional Offer come up on a property for sale, they will take a Slightly Lower offer if it is a Cash Offer over the Conventional Financed offer A) because the cash offer can close fast, which will get it off their books B) financed offers always have the possibility of blowing up and not closing. So to Answer your questions, yes CASH offer for slightly less, and pay attention to the word "Sightly Less" should most of the time come up on top when in the negotiating process. However just remember the Bank Owned process can be a crazy process, and if your looking for representation, you want to make sure your working with someone who has dealt in this process and has plenty of experieice in this process. Just to make sure your offer does come out on top.
I would love to help you out with this process. Feel free to give me a call if you still have not chosen an agent for representation.
Joshua J. Roueche
KW / Jabez Agency, LLC
So yes, there is an discount for cash buyers and always will be. As the agents below me have stated if you are trying to buy a retail property maybe not, but I don't know too many cash buyers out there that would go this route anyways. Much better to finance some of the deal.
So, just comes down to whether you are approaching it as an investor or just a retail buyer.
Viewing a cash transaction from this perspective could cost you losing the perfect home. To the seller there is little difference between a $300,000 cash offer and a $300,000 financed offer. Generally, the major difference is that with a cash transaction is that the seller doesn't have to worry about the buyer's loan being approved.
This may mean the seller may be willing to accept a slightly lesser amount for the property but attaching a "magic" percentage as an expectation could be disasterous.
Our recommendation is to approach this from a purely "negotiations" approach and see what your savings could be. You should be able to save some but don't plan on an set amount.
The answer seems to be a repititive "not really." It's all cash to the seller in the end, whether it comes from a mortgage or your savings account. My colleagues are correct in my opinion that in some cases cash may be a better choice if the property condition is not up to mortgage standards and/or in the case of a seller worried about timing or appraisal contingencies.
Best in your search!
Daniel D Boman
Counselor Realty Inc
The Boman Group
It may help in a quicker close, but the low ball offers I often time see from cash buyers simply doesn't work out to any benifit to anyone because the bank wants what there bottom line is, and they dont care if it comes from a cash sale or financed sale. They way things are going in "today's" market around our local area, there are multiple offers on homes and some are selling for more than list if priced correctly.
Counselor Realty Maple Grove Mn
Where it can make a difference is with properties that are difficult to finance (lesser condition). But again, there is no average for the amount of discount.
Ultimately every thing is on a case by case basis.
Steele V. Propp
Schatz Real Estate Group
No, there is no average discount for a cash buyer.
The advantage of a cash offer really depends on who the seller is and what their situation is. A bank couldn't care less if you bring cash or a mortgage, either way the property closes under their dictates or not at all. A seller that is desperate for certainty might give a discount because the cash means that there isn't a financing contingency attached to the offer.
In a short sale, cash is unlikely to matter to any of the parties - certainly it would be appreciated but the seller doesn't care what the house sells for since they aren't making any money and most will give you whatever you ask for. The bank won't allow the sale at less than market value so it really doesn't matter to them either since they will dictate the terms under which it closes.
I hope that helps.
Coldwell Banker Burnet