Price is the most sensitive issue regardless of the property being financed or bought with all cash. In my experience of over 20 years in Real Estate, I have observed and witnessed several real estate transactions, people negotiating even $2,000 to $5,000 on a price range of over a million.
Like Elva Wormley, the first one who answered your question and mentioned about â€œgood dealâ€. Good deal is a deal that makes sense in investing; it could be for prime residence or for rental property.
Please donâ€™t forget that loan/lien thatâ€™s secured against the property is to be paid in cash each and every month/periodically until that loan amount is paid off in full. That sum of the interest and principal will be much greater than whatâ€™s paid in cash up front.
Hope this clarifies your question.
Have you seen the price of HomePath REO properties when they are first listed for sale? Since there is HomePath financing available with no appraisal required, I you might say price is not an issue if you are financing.
You would be way wrong to make that statement! If you are willing to buy a HomePath property at their inflated list price with their no appraisal financing you will be paying too much for the property and you will be underwater from the time you close escrow.
If home is priced more than the appraisal you will not be able to purchase the home unless you pay from out of pocket for the difference between the price and the appraised value. In this regard, price is relevant when financing a home.
Even when you pay cash, price is still relevant. If your price offer is less than the price offer of another cash buyer you will not be able to purchase the home. Many who pay cash think they are king and come in with low offers over asking. Many also think they can lord it over financed offers because they pay cash. They are in for disappointment because sellers do accept financed offers, that are substantially above a cash offer.
Price of home is relevant whether you finance or offer in cash. I have never known valuation of any property not to be relevant.
Hope this helps.
If you remember Dave Stark at the Marketing Meeting back in July had a nice presentation showing that there are not that many cash offers;
$417K and below: 35%
$417K - 625K: 15%
$625K - 729K: 8% cash offers
Furthermore, the agents also felt that some owners will pass up on a cash offer if that buyer is an investor and not a family, and others mentioned that if the financing offer was a lot more than the cash offer, they take the higher, financed, offer.
I believe price is a factor regardless of whether you pay cash or finance the purchase. Everyone wants to feel like they "got a good deal".
Also, in the qualification process, price is a critical factor.
Elva A. Wormley
C2 Financial Corporation
2845 Moorpark Avenue, Suite 209
San Jose, CA 95128
NMLS #331981 / DRE #01274093