Home Buying in Pensacola>Question Details

Kim Glass, Other/Just Looking in San Francisco, CA

Question on behalf of an interested buyer in Pensacola, FL

Asked by Kim Glass, San Francisco, CA Fri Mar 15, 2013

If buying with cash, can one offer less than the list price? What are the pros and cons of buying with cash?

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John Walin’s answer
It's all cash at closing, is there a cash discount? I would say not much. Only thing all cash brings is in a competitive situation is a non mortgage contingent offer. Any smart listing agent would want a buyer to waive the appraisal as well.
If you are referring a friend from CA to buying in FL, realize FL is a transactional brokerage state with zero signed disclosure requirements or discussion about agency law, what they can and can't do. It is presumed the public is aware of transactional brokerage, TB is the default agency model. TB is like ministerial acts with a confidentiality pledge. The FL agent job is to facilitate the transaction, not represent the buyer, no advice, advocacy or fiduciary care typical in designated and exclusive agency representation.
0 votes Thank Flag Link Sun Mar 17, 2013
Being a Realtor in Florida I am not sure where my colleague in Libetyville, IL is getting his information from but I have yet to take a home to closing without property disclosures signed by buyers and sellers. The only exceptions are on foreclosures where banks have no idea of condition and are selling As Is. The majority of the time I act as a Single Agent which implies a tremendous amount of allegiance to the clients interest and implies a strong fiduciary responsibilty. If by chance we are listing agents and a buyer comes to us and we agree to a contract BY FLORIDA LAW we must then become a Transaction Agent who acts more like a referee. We must sign a legal document informing all parties of this change of status.

To your question Kim sometimes a cash sale can facilitate a transaction quicker and for less money because there is no bank to approve or disapprove of condition of home or the abiltiy of buyer to pay back the loan.Most often we see this with Investors and often these are in distress sales where homes would not meet standards of traditional loans. In distress sales a bank might decide to take a lower cash offer than one that involves financing and contingencies that would slow the process down or make it less profitable.

Obviously , I would always suggest consulting with a financial adviser but it seems with interest rates at historically low rates, all things being equal, perhaps the best way to go would be to make a hefty downpayment in hopes of getting the lowest possible rate and then save your cash for unexpected situations. This is kind of a one shoe does not fit all situation. A really good agent will suggest many options for you and most often Mortgage Brokers can help you decide which is the best financial direction to go in.....
0 votes Thank Flag Link Thu Apr 4, 2013
Yes, sure offer less. Cash offers usually save both buyers and sellers money. Of course the less contingencies or repairs requested the better your cash offer will be looked at.
0 votes Thank Flag Link Sun Mar 17, 2013
Generally a Seller is more open to a lower offer when the property has been on the market for awhile. A new listing that is priced right can generate multiple offers and can go for higher than asking price. Your agent can run comparables and help you determine value.

Cash is less expensive than a mortgage. A $100,000 house will cost $175,000 over the life of the loan, plus closing costs.

You can close in 2 weeks with cash, a mortgage can take 60 days.

If a property needs a lot of repairs, it is harder to find financing, and then cash is king.

Hope that helps!

Marie Skopis
RE/MAX Horizons.
0 votes Thank Flag Link Sat Mar 16, 2013
I would say you can always offer less, however some houses come on the market priced right and sell at or above the asking price, others are overpriced and do not sell. The real question you need to know before making an offer is have there been recent sales in the neighborhood and is this property underpriced, over priced or priced right. As far as the pros for buying with cash, the seller would feel it is more likely to close as many buyers get turned down for financing even after having been prequalified or preapproved by a lender.
I recently bid on a foreclosed home that had 3 bids and sold for over the asking price. It is spring, and homes here are starting to move especially the more desireable neighborhoods in good school districts. I have over about 35 years of experience in Florida Real Estate and am happy to share my knowledge and experience with my clients, woudl love to help. Visit my website at http://www.pensacola-gulfbreezehomes.com for more info about me and to search for homes.
Pam Brantley
0 votes Thank Flag Link Fri Mar 15, 2013
You can always offer less with any offer without regard to cash or financed. Mortgage money being as cheap as it is at this time you may consider a conventional mortgage with a good downpayment or even an FHA loan if you will be making the new home your primary residense. Hang on to your cash if you can and of course especially if you are super qualified for a mortgage. With all that being said there is something to be said for not having a mortgage payment at all. Either way...I can help you find a great home if that is your intention. Call me direct at 850-565-0159.
0 votes Thank Flag Link Fri Mar 15, 2013
The biggest "Pro" of buying with cash in most Seller's minds is the lack of worry over whether you will actually be able to close, and yes, most would keep that fact in mind during their contract negotiations. A preapproved buyer with a large down payment would be a close second in negotiation ability.

A Buyer's greatest asset will be their professional Realtor, acting as their Buyer's Agent, who will be able to advise them on the current values of the types of homes they are considering in the areas in which they are shopping.

You hire an agent to represent you. Call around and interview a few, then select one to work with whom you feel will best be able to provide you with the information and expertise that you need.

If I can help you further, please don't hesitate to call, text or email.

Barbara Murphy
Broker, Tartan Properties
0 votes Thank Flag Link Fri Mar 15, 2013
Hi Kim. You already have some great answers. Your interested buyer will probably be happily surprised at the difference in prices compared to what he/she would find in San Francisco.

As a transplant to Pensacola I understand what your friend is going through. If I may be of any help in making the transition easier please feel free to e-mail me at jack.lynch@mygulfre.com or call 850-293-9953.

P.S. I think your friend will love Pensacola. It's a great place to live.
0 votes Thank Flag Link Fri Mar 15, 2013
Hi Kim,

It doesn't really matter whether it's cash or financed to the seller in most case & the price that's stated is generally not the final selling price. The prospective buyer makes an offer and sometimes the negotiation goes back and forth for a while. A Realtor can explain all of this. Unless the buyer's credit score is too low to get financing, with rates as low as they are, It's actually foolish in most cases to pay cash even if you had it. I'd be happy to explain that to the "interested buyer" if they wanted me to.

- W. Ted Brown - Realtor
0 votes Thank Flag Link Fri Mar 15, 2013


With tax deductible interest rates in the 2% range on some programs, why not finance a portion?

If you can show the seller you can pay cash, but prefer to finance, you can still get the cash price, without the Dead Equity!

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Pro Option Mortgage/ Florida

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0 votes Thank Flag Link Fri Mar 15, 2013
Please remember that the list price is simply the asking price. Most sellers set a price above what they expect to sell for. Some are reasonably higher, others are unreasonably high. A cash purchase has the advantage for the seller of not having to wait for the buyer to secure financing, or sometimes, being unable to secure financing. It also means no waiting for an appraisal or a survey if the buyer chooses not to have those items. A cash offer, with verified funds, typically means a faster closing with less headaches. And that's always attractive to a seller. Please let me know if I can help you with finding a home. Thanks!
0 votes Thank Flag Link Fri Mar 15, 2013
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