In response to your excellent question:
[[ Barry ~
How about repair needed short sale ? Will the buyer still get a better price if the offer is all cash?
Or discount only apply for the REO ?
If 2 offers come in and 1 is all cash and the other conventional loan and the All Cash offer is slightly lower .
Will All cash offer still win ? Will the bank ( for short sale home) still prefer All Cash and less money ? ]]
a) In a short sale purchase scenario, all cash may or may not have an advantage. You see, typically, the listing agent will only submit ONE offer at a time. If we submit more, it confuses the seller's banks. So, we only work with one offer at a time. If several offers come in simultaneously (maybe it's a new listing), usually the SELLER will decide to accept the all-cash (with fiduciary guidance from their agent), so fewer problems will arise later on with Buyer financing issues. The seller decides first, and then that offer goes off to the short sale Bank(s).
b) However, from a Short Sale lender's perspective, the LOSS MITIGATION department is looking to NET the highest possible dollar, and will choose a higher FHA offer, even with paying the Buyer's closing costs, IF the NET will be greater. Once it becomes an REO (real estate owned) the Banks want the asset sold ASAP so cash is king.
c) In order to get your (lower) cash offer to work in a short sale with needed REPAIRS, get a few estimates on what it will cost to complete these repairs, and submit this info with your offer -- be sure the seller initials this paperwork, and create an Addendum to the contract.
d) The exception to the REPAIRS question is when financing is not obtainable at all, since the property is not in lendable condition (incomplete construction projects, major cracked slab issue, missing systems of the home, etc.). In a given marketplace, there are many "must be all cash" short sales due to property condition, which makes finding a buyer difficult at best. Most will end up as foreclosures, or purchased with all cash at the trustee's sale. Be sure you know what you are doing before buying a foreclosure (with all cash) at the courthouse steps!