do you have a better chance on banks accepting offers of cash?

Asked by Sarah9142, 45005 Tue Jun 30, 2009

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Shel-lee Davis’ answer
Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Tue Jun 30, 2009

Here in Southern California - specifically the South Bay and the rest of LA County, cash is not king. A clean, straight forward financed deal paying top dollar is accepted over a lesser cash offer in almost all cases. The bank is looking for the highest net offer by a highly qualified buyer, period. They don't really care where the actual money comes from.

Most all cash buyers expect some discount for their cash offer. With inventory low and buyers on the rise, the banks don't see any reason to give the discount. The trick to landing an deal is, be quick, be clean, be persistent. Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
1 vote
Melissa, Home Buyer, Laguna Niguel, CA
Tue Jan 25, 2011
How long can the bank take to say if you got it or not?
0 votes
Tommy Lee, , 91502
Thu Feb 18, 2010
I think you have a pretty good idea from all the comments below that, yes, in general, banks like cash offers better. The reason is that a typical conventional loan will take 30 days to fund and close. A cash deal can close in 21 days or less. Right now, some FHA loans are taking 45-90 days to fund the loan. They are more picky on the condition of the home.

The Federal Reserve Board used to require banks to keep cash on hand for any asset they owned. So when they foreclose on a home, they have to hold some cash that they would otherwise use for loans, such as car loans etc. So they want to close them as soon as possible and cash is the way to achieve that goal.

tommy lee
Dilbeck GMAC
Burbank CA
0 votes
Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Wed Jan 6, 2010
This will probably depend on the condition of the house. If there is something wrong with it, or the utilities aren't turned on, they may very likely have a problem with someone who goes for financing. On those homes, I am sure the bank knows this, and would go with the cash, which is also a lot quicker for them. If, on the other hand, it is a house that is in great condition because the person didn't trash it, and the loan balance is not more than the house is worth, they may not mind waiting for someone to get financing if the offer is better.
0 votes
Five Star Te…, Agent, Burbank, CA
Wed Jan 6, 2010
Cash is King! I work with an REO company in Socal, and the banks accept offers faster, and with lower prices on CASH deals! The reasoning is that financed deals can fall out and can be held up for appraisal and Cash deals go faster, smoother, and have a much better chance of NOT falling out!
0 votes
Troy, , 75093
Tue Jul 28, 2009
Yes..most of the time cash is king.

Troy in Texas
0 votes
Mission Viejo…, , Mission Viejo, CA
Tue Jul 28, 2009
The bank that is selling a REO isn't going to make money on a new loan. They have nothing to do with the buyer's loan unless the buyer is getting the new loan with the same bank. A cash deal for them is quick and no delays because the buyer didn't qualify after all. It is more "cut and dry".
0 votes
Judith "Judy"…, Agent, New Canaan, CT
Tue Jul 28, 2009
A bank doesn't make money on a cash offer. They will gladly take a cash offer for the listing price (they don't lose any money that way). They make more money on a loan but would not turn down a cash offer. Cash offers are much simpler as you aren't required to do inspections in most states and there are less closing costs. Remember, an offer cash for a home at a reduced price isn't always an incentive for the bank, but any reasonable offer will be considered.
0 votes
Dot Chance, Agent, Burbank, CA
Tue Jun 30, 2009
You probably do have a better chance of getting your loan accepted IF you make a reasonable offer!
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0 votes
Gregory Saun…, , Atlanta, GA
Tue Jun 30, 2009
Absolutely....Cash is King! I just closed a cash deal last week. It was a great deal for the investor. Two weeks after the bank signed off until the deal was closed. Closing took all of 15 minutes.

I also think my clent has more negotiating ability because it was a cash deal. Also, for my note!
0 votes
Mission Viejo…, , Mission Viejo, CA
Tue Jun 30, 2009
Yes, banks like cash offers.
0 votes
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