Home Buying in La Grange>Question Details

Beverly Sull…, Home Buyer in 28580

if you pay cash for a house can you get it cheaper than the asking price since there will be no financing and no involvement with your credit score

Asked by Beverly Sullivan, 28580 Fri Dec 18, 2009

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Cash is king and cash means a guaranteed closing that will happen quickly. It still depends on the seller and what the seller needs. You can certainly negotiate a lower price though that doesn't mean you will be able to get a steal. If the seller is ready to get out at almost any cost, you'll get a great deal. If the seller needs a certain price for other reasons, who knows what you'll negotiate.

Good luck. I think you'll do well.
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1 vote Thank Flag Link Fri Dec 18, 2009
Beverly it all depends on the condition of the property. For an owner occupied move in ready home the seller does not worry about about if the offer is all cash, half cash, or even in my area with USDA no cash 100% financing. On the other hand if the property is lender owned they look at the chances of the offer making it to closing. Pealing paint and broken windows will eliminate an FHA loan for a buyer unless repairs are done before closing. Utilities must be turned on for any government loan product at appraisal and lenders do not like to turn on utilities and pay to dewinterize a home. In these cases cash is a strong offer and will normally get you a lower price than one involving a loan. There are exceptions to this but 95% of the time this is how it works.
Web Reference: http://www.Find1Home.com
0 votes Thank Flag Link Sat Dec 19, 2009
The seller's motivation will factor into this equation, so there is no telling if an all cash deal will translate to a substantial discount off asking price.There are always sellers who have the need to sell quickly - be it because of divorce, financial trouble (think layoffs, preforeclosures, bad investments, etc), estate settlement, or what have you - and they're the ones who will likely be more flexible with price. An easy way to find out why an owner is selling is to ask their agent. You may or may not get much of an answer, but many times you'll gain some insight that might give you some sense of negotiability.
0 votes Thank Flag Link Fri Dec 18, 2009
Not so often as you would think.

There's a concept in finance, Time Value of Money, and with interest rates at Very Low, people are willing to wait a month for you to work out your financing if there's a significant difference in their carry-away money.

Also, the dirty little secret about the cash buyer? They can afford to walk and leave their earnest money behind. The 3.5% down buyer? Not so much.
0 votes Thank Flag Link Fri Dec 18, 2009
It depends. Most of the time cash is preferred. It is dependable and will not go away at the last moment before signing as financing can. Generally speaking cash will win against financing options. But it is not always true.

Highest and best offer could be seen as $125k cash or $150k mortgage depending on the seller. Often I keep reading that foreclosures sell to cash at lower offers than was made with financing. But a real seller who wants the highest amount may or may not take a lower cash offer. They may decide to accept a larger mortgage based offer hoping to net more money when (if) the financing comes through.

Look at it from another perspective. If you were trying to sell your house, and wanted to sell it quickly would you rather take a lower cash offer that WOULD close or risk taking a higher offer based on financing that might not happen? In essense that is the choice many sellers are making. Take a sure thing at a lower price or something that would give you more money but might not work after working on it for a month or more. Some will take the lower cash offer to be safe and sell. Others would take the financing praying they made the correct decision.
0 votes Thank Flag Link Fri Dec 18, 2009
Hi, in theory your idea makes sense, but this is an open market and on great properties multiple offers are a must.

Always best and higher, always.
0 votes Thank Flag Link Fri Dec 18, 2009
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