Ashley, Other/Just Looking in

Okay so my fiancee and I are looking to buy a house in OC with cash, typically how much lower can you get them or should you bid?

Asked by Ashley, Fri Mar 23, 2012

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Hi Ashley,

There have been some good answers posted already and I wanted to add a few more thoughts. There are many variables to take into account when making an offer and it is important to do the necessary research prior to submitting your offer. If I were representing you as a buyer I would first find out if there are any other offers on the property and I would try to obtain as much information as possible. Are you considering offering on a bank owned, short sale or standard equity sale?

I have had a lot of experience with banks from both the listing side and representing buyers. If an all cash offer is going up against a financed offer, I have seen banks select the all cash offer even if the financed offer is offering $5k-10k more on a $500,000 house. This is only about a 1-2% discount for paying cash. I have also seen banks select the financed offer if there is a greater spread than this amount.

Many people believe you can get a much more significant discount when paying with cash, but as noted before, the best way to get the larger discount would be to offer on a property that needs substantial rehab work and may not even qualify for conventional financing.

If you need any assistance feel free to contact me, I would be happy to help.

Gabe Cole
1 vote Thank Flag Link Thu Mar 29, 2012
Hi again, Ashley.

Here's another factor which hasn't been addressed yet. You may be reading reports that say that "investors" ( Cash buyers.) are getting 10-20, or even 30% discounts for cash. What those reports conveniently neglect to mention, is that THOSE represent purchases at an auction, or at the courthouse steps.

THOSE buyers are taking a HUGE risk in many cases as they usually haven't had access to the interior of the property - to ascertain its level of disrepair - and they MIGHT be purchasing a property with an occupant who not only has yet to be evicted - but who MIGHT do considerable damage on the way out.

If you are looking for "opportunities" such as THOSE, you should subscribe to some good local providers of impending foreclosure information, such as RealtyTrac, or ForeclosureRadar. ( I am subscribed to both.)
0 votes Thank Flag Link Wed May 2, 2012
Ashley,

There are many factors that go into how much of a discount you can receive when paying with cash. It is often not a major discount, but it can be an easier process than the typical mortgage process. Feel free to contact me and we can discuss specific details. I'd love to help you out!

Samantha Baksic
http://ocbeachcitiesrealestate.com/huntington-beach-homes/
714-330-2021
0 votes Thank Flag Link Wed May 2, 2012
Ashley,

I like Gregg's comment. I have helped many couples purchase pre-marriage and MOST have ended in a break up. They all seemed like good relationships but talking about finances before the relationship is ready for that kind of talk will put a huge financial stress on your relationship. I would love to earn your business in HB (I live in Huntington Harbour) but I would say RENT until you get married, save up 6-12 months worth of expenses then look at buying. Have you lived together for a long time? Have you shared income and expenses? Made other purchases together? Just things to consider...

There are a lot of factors here, but if you are truly set on purchasing, each seller will have a different view on how much weight and discount they will give to an all cash offer. I agree with Gabe. I've seen a 1-3% discount for cash offers but there is no "norm." A qualified agent will be able to help navigate you through this process by recommending an offer price for each specific property you're interested in and can help you gauge interest. It will depend if the choice property has other interested parties, time on the market, etc.

Also, is this a standard sale or is this a short sale or foreclosure? In my opinion - short sales and foreclosures are predictable in the discount an all cash offer will gain - generally speaking.

Best of luck on whatever you guys decide!
0 votes Thank Flag Link Sat Apr 21, 2012
Ashley, has he actually officially asked you to marry him and set a date? This could be a big investment for you if you don't have a real commitment with this guy. I know how I've been with women, smooth talking...etc. Would feel sad if you moved all the way here and he was just a flake. Catch my drift:)
Stay Sweet
0 votes Thank Flag Link Fri Apr 20, 2012
Ashley, I don't know beans about prices in Huntington Beach, but I will tell you about my experience further South and inland. In MY area of expertise, there are two distinct tiers of pricing, a lower level which has mostly distressed properties, ( Short sales, and bank owned REOs.) and a higher priced level, which is primarily equity sellers who are not distressed.

In most cases - not all - the equity, non-distressed properties are in MUCH better condition, and they get prices averaging 12% higher, than nearby distressed listings, which are USUALLY in much poorer condition, or have poor locations, or both.

Right now, in MY area, nice properties are going quickly into escrow, without much of a concession - cash, or other-wise. In many cases, there are multiple offers - and THAT is an area where a cash buyers stands above the rest, because they're not contingent. You might not get much of a discount, but you SHOULD get the house.

Good luck in finding something perfect for you and your fiancee.
0 votes Thank Flag Link Thu Mar 29, 2012
It's surprising to a lot of people that you can't that much of a better deal with cash than you can financing. Vidi has a good answer below. I think 5% or less is about right. Maybe if the property is in real bad shape and couldn't be financed, you may be able to get a bigger discount.
0 votes Thank Flag Link Thu Mar 29, 2012
Hi Ashley,
It really all depends on the home you are considering. Send me the address and I will pull up the recent sold, pending, and actives in the area so that I can give you a better idea as to how much you can offer. Normally with cash you can offer 4-6% less than the asking price. However, if the property in in an area where homes are selling quickly then you want to come in at 2-3% less. Other factors also come into place such as the condition of the property, which is why it depends on each home. Also, what ever your offer is you should make sure you have a good agent on your side that can negotiate on your behalf. You can call, email, or text me, I'm always available.

Vidi Barker
949.945.4857
BarkerV@live.com
First Team Estates
DRE # 01896093
0 votes Thank Flag Link Thu Mar 29, 2012
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