I sthe cash offer always wining offer?

Asked by Zoran, Chicago, IL Mon Mar 9, 2009

I recently try to buy my dream house , and my offer was the highest, but my realtor call me and sad that we loose becouse they except cash offer , is that posible please i need quick answer becouse i tought that biggest offer is always win.thanks

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Tom McCarey, Agent, Chicago, IL
Mon Mar 9, 2009
Wayne brings up an important point in his response - a good agent is able to discern motivation in a transaction. This is really important because what this implies is that the situation is not simply black and white.

In a black and white situation something as fundamental as price will rule the day. In fact and reality there are any number of what a good agent will refer to as value points. There's timing, there's certitude of funding, there's the overall nature of the offer, and some times it even comes down to the seller preferring or liking one buyer better than another. In other words, in a real estate transaction it is not all things being equal.

It is conceivable that your agent did you a disservice by not asking the right questions to enable you to make the strongest possible offer. It is also possible that the offer you made was the best offer you could make and there was no manner in which you could have prevailed.

Back to your original question - a cash offer is not always the winning offer. Where it does win, though, is when the seller find the specificity and certainty very desirable. For a seller few things are worse than a deal going sour. Deals go sour more often these days than in the past because a prospective buyer's financing falls apart.

Anyway, sorry for your inability to negotiate the purchase of the property you desired. Good luck with future endeavors and finding an agent who is able to do your bidding professionally and responsibly.

Thomas McCarey
Certified Negotiation Expert
Luxury Home Marketing Expert
Accredited Buyers Representative
@properties with The Real Estate Lounge Chicago
1 vote
Wayne Beals, Agent, Chicago, IL
Mon Mar 9, 2009
Hello Zoran,

Time can cost money to a seller. The best offer will always wins. What defines the best offer is in the mind of the seller. This can mean a quick closing, high earnest money, top dollar, proof of funds, etc.

Usually, a good agent can help you understand a seller's top motivation, which will help you tailor your affer for the best possible outcome.

Best of Luck.
0 votes
Eddie Ruetti…, Agent, Plainfeild, IL
Mon Mar 9, 2009
The winning offer Zoran is the offer the seller picks! In some cases the seller will take the highest offer. In others the sell may take cash in the fear that the offer will not close. They may be taking less for the home but they know they will have less issues getting it closed since there is not bank to deal with. Keep an eye on it. The deal could always fall apart or see about being the back up offer.
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0 votes
JonTheBanker, , Chicago, IL
Mon Mar 9, 2009
Unfortunately, that is not that case, Zoran. To not win an offer due to financing contingencies is part of the negotiation process... and losing a deal to a lower cash offer can happen. There is no standard rule as to which offer is accepted and on what basis. From the seller's perspective, maybe the cash offer was a better deal due to a culmination of variables in this market. For cash offers, the following are some things to consider regarding acceptance over a higher financed offer:

1. there is much less of a waiting period to close the deal so it lowers the cost to carry for the seller.
2. The seller is likely aware that the financing available today is not as reliable and much less available so he/she would want to avoid the hassle of the financing process...as the deal could potentially have a higher probability of not closing in the seller's mind.
3. The seller is in a pinch and needs to close as quickly as possible, hence, the lower offer with cash may be satisfactory enough.

There are many more possibilities than this as well. Sorry to hear you missed a good opportunity but, realistically, it means that something better is to come. Keep looking. There are many opportunities out there. If any further guidance is needed, a private email or call is best. Good luck.
0 votes
Real Estate…, Agent, STATEN ISLAND, NY
Mon Mar 9, 2009
Zoran,
I know its sounds strange that a home seller will take a lower cash offer rather then a higher offer. But sometimes timing is more important to the seller then the price. It;s very possible that the seller needed to sell quickly and that's whay they accepted a cahs offer.
0 votes
Maria K Than…, Agent, Chicago, IL
Mon Mar 9, 2009
Cash is always good. The seller then does not have to worry about mortgage contingencies. The cash offer in today's financial environment is the most desired. Look at it from the seller's perspective..... You have your home on the market for 350K. You get a full-price offer with a mortgage contingency and very little down, but a full price offer. The other is 342K is cash no mortgage contingency and they are putting 20% down and closing in 30days. Which offer would you take? Which offer will close easier? Good luck and I hope this helps.
0 votes
Scott Newman, Agent, Chicago, IL
Mon Mar 9, 2009
Cash is king in many cases. You should get a pre-approval from the bank that owns the property. That works a lot because they will make some much money off you if you take 30 years to pay it all off.

Scott Newman
Newman Realty

P.S. the link will take you to a syndicated blog I just had published about how to effectively buy foreclosures.
0 votes
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