The Listing Agent does not accept offers, only the Seller does.
As "K&K" commented below, the Seller may consider the extra $10K to be significant.
Perhaps the accepted offer was better packaged or you asked the Listing Agent to submit an offer and the Sellers did not want to enter into a dual-agency situation.
Your best bet to get a straight answer is to have your RealtorÂ® actually call the Listing Agent for some feedback.
The adage, "Cash is King" is not as true today where everyone is trying to get as much for their properties as possible. The advantages of cash is no appraisal, so the property can sell for over the current comps, (if the buyer is willing), but aside from that, if the higher offer buyer has a solid pre approval it will beat out other offers.
Hope this helps...
It's very possible that the offer they accepted included documentation showing that the buyer was an excellently qualified buyer, who was putting 50% down, and was only asking for two weeks to produce a mortgage commitment. Hence the seller's "exposure" was limited to two weeks, and had an excellent chance of paying off, and gaining him $10,000 over your offer (not an insignificant amount of money, I'm sure you'll agree).
While obtaining a loan, these days, is far from a sure thing. The seller clearly felt it was worth the risk... as it's all cash (to the seller) at the closing table.
Why wouldn't a seller want $10K more. So many buyers make the mistake that cash is king. If someone wanted to get a loan and pay me $10K for my house I would take it, wouldn't you?
If two offers were equal with one being financed and the other being cash, I would absolutely lean towards the cash offer. $10,000 is a lot of money to a seller though. So, if they are fairly confident in the buyers borrowing capability, I would absolutely go for more money.
I've found that cash buyers tend to bid lower than those with mortgages. While some sellers might favor tthe cash buyer, some would rather go for the higher price.
Now please let me ask you a couple of questions.
Assume you are selling a house you own free and clear and I am trying to buy it.
I offer you $100,000 all cash close within 30 days.
Buyer #2 offers you $110,000 closing within 30 days. Buyer two is getting a loan from a bank and provides you a letter from the bank saying that their credit has been checked and they are approved for the loan. All they need to do is find a house.
Would you like to deposit $100,000 from me into your bank account or $110,000 from buyer # 2 into your account?
Do you care if the money you get comes directly out of my account or directly to you from a bank that loaned it to the buyer.
I bet you answered that you would take $110,000 from buyer 2 and you don't care where the money came from.
Let's take this scenario and turn it around.
Say there are two homes that are completely identical. One home you can have in 10 days but you have to pay $10,000 more, the other you can have in 30-45 days but it's $10,000 less.
Which do you choose?
Well, if you were living in a hotel room with 3 kids, a dog, and an angry wife you would probably choose house #1 and cough up the $10k just to keep your sanity. If you were renting month to month and liked the home you were in you would probably wait the 45 days and save the cash.
The point being that the seller has their own motivations and it's not always easy to tell what they will do. The same with buyers..
Hope that helps put it in perspective.
I did a video blog post about this topic recently, check out the link below -
A: Because itâ€™s $10,000 more in the sellerâ€™s pocket when the deal is done. Thatâ€™s a lot of money and, as pointed out below, even if the buyer is getting a loan, it translates to cash at the end of the transaction. Thereâ€™s a misconception out there that if you offer cash, you can automatically get the property for less. It might work if you are buying a foreclosure AND if your offering price is marginally better than those with financing, however, normal sellers want as much as they can get. And it doesnâ€™t matter if you offered more than asking â€“ clearly someone offered more than you.
Additionally, as stated below, itâ€™s not the listing agent who makes the decision â€“ itâ€™s the seller. Iâ€™m not going to second guess the listing agent, but if it had been me, I would have recommended to the seller that they counter the top offers to try to get you â€“ the cash buyer â€“ up to the same amount being offered by the highest bidder with a loan. Donâ€™t know if that happened or not, but if you dug your heals in and wouldnâ€™t go any higher, then Iâ€™d recommend to the seller that they accept the offer with the highest bottom line.
Keep in mind as well that if the transaction doesnâ€™t appraise for the buyer with the loan, it may become available again. Have your agent talk to the listing agent to make sure you are in a back-up position â€¦ just in case.
Good luck to you!
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It would be the seller who would be accepting the offer for $10,000 higher than your cash offer; not the agent. The reason for this .....sellers are looking for the highest price. If a buyer is pre-approved, he is credit worthy and the funds will be available at the closing table.