how much of a discount can you expect to get on a cash offer?

Asked by Cindy, Cuyahoga Falls, OH Mon Jun 30, 2008

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Bruce McKinn…, Agent, Mukilteo, WA
Mon Jun 30, 2008
Discount on what? Two answers: (1) Today, a cash offer, like any other kind of offer -- e.g., conventional loan, FHA or VA loan, etc -- requires verification from your bank and/or Investment fund that you actually have the cash you claim. Too many Realtors have found that the cash offer turns out to be vaporware because the buyer (a) decides the property is not for them, (b) does not have liquidity and cannot make all or a part of the funds available by the closing date, or (c) simply does not have the amount pledged. At least in the case of a LOAN, the bank or mortgage company will be asked to provide a PRE-approval letter which, while not a guarantee, has survived the day about 98% of the time. Not so with a cash offer. However, a cash verification letter from a respected financial institution that speaks to liquidity at the time of the offer would be acceptable. (2) The second answer relates to the seller’s situation. Assuming the buyer can address the above issue, the offer may be judged to be a strong offer when compared to NO offer or another offer (multiple offer scenarios). At this point, the contract becomes one of PURE negotiation – like most real estate contracts. Some sellers may want their price regardless of the offer financial mix, while others might jump at the chance. So, it is a “transaction specific” Issue. Reverse your question. If you were the seller, how would you see a CASH offer for your home? How would you think you might handle an unverified cash offer? What if the offer you received you perceived to be a “low ball” offer? When you look through this window, it is amazing how LEVEL the playing field tends to get.
2 votes
Bill Eckler, Agent, Venice, FL
Mon Jun 30, 2008
Cindy,
The benefit of using a cash offer is the seller knows there will be no "loan contingency" Thus, it becomes a more serious buyer in the eyes of the seller. To keep this desirable buyer, the seller often consider a slight discount. (often NOT always)

This amount depends on the seller's attitude or motivation, already discounted price, price of recently sold similar homes etc.

A range of 5-10 % could be possible but then again it could be 0%.

Good luck,

The "Eckler Team"
1 vote
Dallas Texas, Agent, Dallas, TN
Mon Jun 30, 2008
NONE cash is cash same as a loan, the seller still owes the same to pay off the house and closing costs. http://www.lynn911.com
0 votes
Cindy, Home Buyer, Cuyahoga Falls, OH
Mon Jun 30, 2008
well it use to be money talked, and a cash offer was far superior to a loan, and would get you a lower price on the property.

and putting the shoe on the other foot...........a cash offer is faster, and less things to go wrong.
0 votes
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