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Fernando, Home Owner in Springfield, VA

I would like to purchase a $100K home, how much should I expect to pay if I offer cash?

Asked by Fernando, Springfield, VA Mon May 28, 2012

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13
Great answer by USF Dad, "Never pay sticker"!

Only one problem with the answer, if you follow it, you will be forever looking to buy a home.

Now, I am sure USF DAD is very knowledgeable in his field, but Florida Real Estate is something he has little current knowledge.

TO WHIT: Many homes listed are Short Sales or REO, and the people that are going to make the decision to sell, are well informed (by Economist /Realtor's like me) as to what the market value of the home is. Market Value is WHAT an informed buyer will pay for the home. They are not likely to sell for less than market value.
If you believe UCF DAD, then you believe I would give you 10 $100 bills for 45 $20 bills.

Now it you are not ready to change 50 $20's for 10 $100's we are not going make a deal. There is NO good reason to do so as I can find most any bank in the world to make such a deal, why do I need you?

Several of the Realtors who answered your question are VERY good, knowledgeable Realtor in the area (I am not in the area)
0 votes Thank Flag Link Mon Jul 9, 2012
Fernando
Homes are like new cars never pay sticker. Also look at the profession of the people responding, while I'm sure that they are providing their best advice, they were providing the same advice when the market was 30%-50% higher. Do your own DD (Due Diligance) and get a feel for the area. There is a lot of information to be gleamed from the internet some good some bad. When you are ready, contact a realtor to represent you, someone to look after your interest. Remember this is business and not personal Its you money not theirs. Goodluck and remember "Cash is King" especially in short sales and foreclosures.
0 votes Thank Flag Link Mon Jul 9, 2012
Fernando...if there are multiple offers on a home then cash carries weight with similiar offers. If it is a bank owned property or a home with issues like the age of the roof or repairs are needed, cash has weight against a mortgage, which might not approve the loan because repairs are needed. As far as value...at closing the Seller is ending up with cash either way. Have your agent do a market analysis of the property you choose and base your price on that. Cash does not mean deep discount.

I feel an informed client makes the best decisions regarding their real estate needs. Let me know if I can be of assistance.

Sincerely,

Pam Cohn
Broker Associate, GRI, SFR, NHS
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty
2539 Countryside Blvd #3 Clearwater, FL 33761
pcohn@prutropical.com
727-204-7155
http://www.FromCavesToCastles.com
VIEW PROPERTIES ON YOUR SMART PHONE
TEXT "PAMELA" TO 727-213-5142
0 votes Thank Flag Link Fri Jun 22, 2012
I have several short sales properties, were we have offer $90,000 if the investor was asking for $100,000 as the investors/lenders want to move their inventories is a good chance for your offer to be accepted... even if there is other offer for $100,000 and this requires financing... The investor more likely will accept the $90,000 cash... the reason is because financing offer will require inspections, and investors are scare to lose the chance to move their inventories.

I work with several investor/lenders I have done over 1200 BPOs Broker Price Opinions... and I know what they think...

I hope this answer your question, otherwise feel free to call me 727-432-2181, I will be glad to work with you and help you find a good property at a good price.
0 votes Thank Flag Link Fri Jun 22, 2012
Are you actually asking about closing costs on a cash purchase of $100,000? That is determined by several factors, including taxes, and various fees charged by the title company to produce a clear title to you, the new owner, and well as other title and closing services the sale requires. The bottom line is that many closing costs are associated with financing a property, such as paying down the interest rate, appraisals, surveys, lender fees, fees to record the mortgage, insurance, etc. So, in that regard, a cash purchase is less expensive for the buyer because they do not have to pay those costs.

Some inexperienced buyers are under the impression they can offer low-ball offers on any property on the market. Here in Pinellas County, the opposite is true. I have seen many houses go on the market for a few days, cause a bidding war because they were already priced aggressively, and then sell for more than the list price. Cash or financed did not make a difference. Area statistics show we have about half the number of houses now on the market as we did a year ago, and the average sale price is up. Anyone who is interested in the latest stats is free to contact me.

Do align yourself with a professional Realtor to help you make an offer. A buyer's representative can save you money by negotiating favorable terms and can show you all the comparable data so you will know if the house you are considering making an offer on is well-priced.

Good luck, Fernando!
0 votes Thank Flag Link Tue May 29, 2012
I suggest working with a local agent to give you an idea of current price value of the house you are looking to purchase. There's no rule of thumb on how much a cash purchase should offer. It's attractive because the seller does not have the concern about appraisal value and waiting for you to secure financing. If your offer is too low, however, the seller will most likely wait for a more competitive offer unless it's desperate situation to sell. A local agent, preferably a buyer's agent, will help you with how to proceed.
0 votes Thank Flag Link Tue May 29, 2012
Depends on the situation of the seller and the house.
Will the house have inspection challenges?
Will the house fail an FHA physical exam?
What is the sellers need to sell?
What is the seller urgency?
What is the sellers time line?
What is the market forecast for the community? (Market In A Minute)

A cash offer allows you to modify the 'terms' of your offer to solve problems faced by the seller.
As stated earlier...at the closing table 'IT's ALL CASH!"

As the real estate professional representing you shared, "A purchase offer is as much to do about terms as price. " You are working with a pro, right?
0 votes Thank Flag Link Tue May 29, 2012
AS seller, if your accept a cash offer of 90,000 rather than 100,000 with a pre approved buyer, with the cash offer you get $90,000 at closing, with the fiance offer you get 100,000 at closing.

Let me ask you Fernando, which would you accept????
0 votes Thank Flag Link Tue May 29, 2012
Do not assume that because you are paying cash, there will be a discount.

All things being equal, a seller certainly would go with the cash offer, over one with a mortgage contingency, if there are multiple offers.

It all depends on how well the home is priced...how long it has been on the market, .....and how many, if any, other buyers are interested in it...........
0 votes Thank Flag Link Mon May 28, 2012
Fernando,

If the house is worth a $100k, then the price will be close to. Being from the area you are probably aware that inventory is down. If a property looks really good chances are you won't be the only one to think so. On a bank owned property or a really motivated seller with equity you may save a little on cash, being able to close faster and. no worry about your getting the loan or the house appraising. Even so have your agent do a Comparative Market Analysis to justify/verify your offer.

The biggest savings with a cash deal is probably your savings in closing costs, since most of those are related to the loan and pre-paids such as insurance and taxes which are collected up front at closing when there is a mortgage. This can range from 3-6% of the sale's price.

If you are paying cash you will need to provide proof of funds with your offer. This can be a current bank statement, portfolio statement, 401 or a combination of the above.

I feel an informed client makes the best decisions regarding their real estate needs. Let me know if I can be of assistance.

Sincerely,

Pam Cohn
Broker Associate, GRI, SFR, NHS
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty
2539 Countryside Blvd #3 Clearwater, FL 33761
pcohn@prutropical.com
727-204-7155
http://www.FromCavesToCastles.com
VIEW PROPERTIES ON YOUR SMART PHONE
TEXT "PAMELA" TO 727-213-5142
0 votes Thank Flag Link Mon May 28, 2012
Market value.

A home will sell for what a ready, willing and able buyer is qualified to purchase and what a seller is willing to let it go for.
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Mon May 28, 2012
Ummm. $100,000, more or less.

You might get a discount if you offer cash. On the other hand, I've seen plenty of non-cash offers get a property for less than the listing price.

But if it's worth $100,000, expect to pay close to that amount. Look: If you offer substantially less, you'll get outbid and the cash offer won't make up the difference.
0 votes Thank Flag Link Mon May 28, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
For most of our sellers cash hasn't made a huge difference as compared to a financed offer. Yes, it does eliminate the hurdle of a financing contingency. However, the seller ends up with cash in the end whether the sale is financed or cash. So, cash won't always get you a huge discount. The best thing to do is figure out what the property is worth to you, offer a bit less, and negotiate hard. We have seen properties go for 30% less than asking price to 10% above asking price. So, don't worry about what the asking price is, worry about at what point is it a reasonable price for you.
Web Reference: http://keithandkinsey.com
0 votes Thank Flag Link Mon May 28, 2012
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