I received an all cash offer that is below asking price. How do I get the buyer to offer a higher price? Is this person a flipper?

Asked by Anne, 11210 Sun Mar 6, 2011

Help the community by answering this question:

+ web reference
Web reference:

Answers

28
Rhonda Holt, Agent, New York, NY
Sun Apr 24, 2011
You have to undestand that cash buyers are usually investors. That means, they are looking to possibly renovate and resale your property within a few months. So since this may be an investor making a cash offer, then they will want to pay the bottom price in order to make the largest profit. Also, cash buyers feel since they can usually close within 30 days or so, instead of you dealing with a buyer to hopefully be approved by a lender that can take months longer is a convenience for you.
Web Reference:  http://www.RhondaHolt.com
2 votes
First Last, , 90002
Tue Mar 8, 2011
I just want to add: Whether the buyers plan to re-sell the place right away (flip it), or not, is absolutely none of your business.

If you are focused on anything that's irrelevant to your deal--including the possible profitability of a buyer in the future, what color they want to paint the inside, the fact that they hate the way you re-did your kitchen--then it really is too bad you don't have a broker, because to sell property as an owner (and I've done it), above all, the owner/seller has to be pure business and focused on the task at hand.

Readers who follow my posts know I am not one of these people who pushes agents/brokers at every opportunity--absolutely not. But here you are, selling your own place, and you're posting anonymously on Trulia to ask what to do when someone makes you an offer?? Of course it's your decision, it is your property. But you sound like the kind of person who risks gets taken advantage of, or not selling at the highest possible price, which could mean less money in your pocket than if you had had a broker working for you.

Karla Harby VP
Rutenberg Realty
kharby@crrnyc.com
2 votes
, ,
Sun Mar 6, 2011
Anne,

It sounds like that you are not represented with a listing agent. Believe me, having a real estate professional working for you on this transaction to ensure the right price would have been money well-spent.

At this point, you can counter the cash offer with a price that you can live with. But, be prepared for this Buyer to walk if the price is much higher than he wants to pay.

All the best!

Dianne Y. Ayala Steffey, MBA, CLU, ChFC, NMLS #267658
Sterling Mortgage Services NMLS #373771
2929 Mossrock, Ste 222
San Antonio, TX 78230
210.349.2102
210.349.1544 fax
210.831.8749 cell
http://www.sterlingloans.biz
2 votes
Bill Nichols, Home Buyer, Brandon, FL
Fri Jun 12, 2015
My mom is relocating into assisted living. She now needs to sell her home. She has a cash offer thru someone we knew in the business .. the cash offer is $60,000. The address is 1428 10th Avenue Albany, GA 31707. the house is in fair shape .. we will sell AS IS. The neighborhood has not been a great selling area for homes.
Although this offer is very tempting to her as she definitely could use the money for the expenses she will have with the assisted living, how can we determine if it is fair. She definitely does not want to go thru the long process of listing and awaiting offers. Hope you can give us some insight.

Thanks
Bill
0 votes
My NC Homes…, Agent, Chapel Hill, NC
Sun Mar 25, 2012
Anne,

First of all I'm curious if you are working with an agent or are trying to sell on your own? I'm guessing it's the latter. Regardless you need to understand that you will probably never get an offer for your asking price and should have absolutely no expectation that you will.

You can counter the buyers offer by responding and letting them know what price you would accept. Bear in mind they may simply walk away or they may counter with a new number.

Who cares if they plan on flipping the house. Sellers should only have one concern about who is buying the house and it's whether they can in fact close per the contract. Who they are, and what their plans are are frankly not pertinent.

The advantage of a cash offer is twofold. You do not have to worry about whether the property will appraise or if they can get a loan, and they can close quickly if they and you wish.

Good Luck, I hope you make your deal.
0 votes
Donna Wisnie…, Agent, Annapolis, MD
Sun Mar 25, 2012
Simply by counter offering their offer. However, keep in mind that technically by making a counter you are rejecting their offer and the buyer can walk away ! The bottom line is how much you will net from this particular offer. If you are satisfied and need to settle quickly then it might be the right buyer for you. Time is money so if your home went back on the market are you in the position to wait for another offer to come along. The cash deal has a value since it means that it is less risk and usually a quick settlement.It should make no difference to you whether the buyer is a flipper.The next question is whether your house was priced at the fair market value or below?How long was your house on the market?Question is how long will you have to wait for another offer and will it be better than this one you have in hand?Sometimes the 1st offer if the best offer. At least you have an offer. There are some sellers that are still waiting for one to come along! Best of luck,Donna
0 votes
Thomas Brady, Agent, Plainview, NY
Sat Mar 24, 2012
You can make a counter offer, give him your bottom number either he meets it or not, or come down in stages until you find middle ground. I wouldn't get too wrapped up in what he will do with the property, consider what's best for you. If he is attempting to flip it so be it, many people feel that they made a bad deal when the home resells for more money after they sell it. The truth is usually though that the person flipping it has skills, access to cheap labor, a pipeline of cheap materials, the knowledge of what to do and how to get it done cost effectively, etc.. Many homeowners without the proper skills, knowledge and guidance would more likely take a bath than make a killing by trying to imitate a flipper.
0 votes
I'm selling a 4 unit apartment and have 2 cash offers on table , property in fair condition and no cash are mortgage iusses both offers walked away lol I expected I would not give my places away on the cheap and my bottom line was the only number that mattered
Flag Sat Jul 1, 2017
Sharyn Willa…, Agent, Blanchard, OK
Sat Apr 2, 2011
sometimes people who think they are cash buyers think that its better. The seller still has to pay off his/her existing mortgage (if they have any), cover real estate commissions,

Could be several reasons, I would just ask " are you gonna live in this home"? or something that will stir a conversations...
0 votes
Rhonda Holt, Agent, New York, NY
Fri Mar 25, 2011
I'm not sure if your buyer is a flipper or not, but most cash buyers offer below asking price. But if you are dealing with an investor then this is extremely common because they are looking to make a profit within a few months. Investors feel that since they can close within 30-60 days and offering cash it is a convenience for you beause you don't have to deal with a buyer going through the bank for a mortgage.

You may be able to get the buyer up depending on what homes are selling for on the high end of the market. Remember, it's all about howm much money an investor can make. I hope this answer can help you.
Web Reference:  http://www.RhondaHolt.com
0 votes
Gita Bantwal, Agent, Jamison, PA
Tue Mar 15, 2011
In this market buyers typically offer less than asking price.When it is a cash offer most often they offer less even in a better market. How did you come up with asking price? Do you have a sale price in mind ? Do you know what you will net after paying for closing costs? Do you have an agent or an attorney to help you? Make sure you understand the contract and know state laws.
You can always make a counter offer and the buyer can either accept or make another counter.
Web Reference:  http://www.gitabantwal.com
0 votes
David Rogoff…, , Brooklyn, NY
Mon Mar 14, 2011
Dear Anne:

Most offers are below the asking price so this is not unusual.

A flipper or investor will generally have a lower ceiling than your standard buyer. If they are experienced they have accurately estimated the repair/fix-up costs calculated at a contractor's level not the average retail cost for repairs. They also have a very good idea of the selling price of the upgraded property.

We have a TLC/Handyman Special in Marine Park that is in contract with an investor/flipper. The location was great but the condition (required kitchens, baths, floors etc. plus a bad mold problem) was a big issue from a retail repair perspective (approx. 75 to 100k) plus we had advised the seller of the risk of lenders refusing to lend due to the poor condition of the home. We advised the seller to accept an all cash offer that was slightly lower than the offer requiring financing. We were even able to negotiate additional moneys that narrowed the gap between the all cash and financing offers to an amount that was acceptable to the seller.

The responses mau be different if the community knew the condition of the property you are selling.

Best of luck...

Bonnie Chernin and David Rogoff
Fillmore Real Estate Branch #19
2926 Avenue J
Brooklyn NY 11210
917-593-4068 (David’s Cell)
646-318-5031 (Bonnie’s Cell)
davidrogoff@fillmore.com
0 votes
Dp2, , Virginia
Tue Mar 8, 2011
Why does it matter whether or not that buyer is an investor? A seller has 3 choices: he/she/they can accept, reject, or counter an offer. A buyer has no obligation to pay whatever a seller wants; similarly, a seller has no obligation to take whatever a buyer offers. A seller has only the seller's interests in mind, and a buyer has only the buyer's interest in mind.

Keep in mind that the longer a property sits on the market, the more that the potential buyers will think that property isn't worth that list price.
0 votes
Fajardo Dela…, Agent, Flushing, NY
Mon Mar 7, 2011
We all agree that a listing agent must earn thier commision make them work.
Web Reference:  http://www.desire2own.com
0 votes
Gail Gladsto…, Agent, 11743, NY
Mon Mar 7, 2011
There are a couple of answers to this question: 1) I have never known anyone to offer asking price; there always seems to be negotiation; and 2) an all cash offer is worth more than a financed deal...a better offer by someone who needs a mortgage may not qualify for that mortgage. Cash is a sure thing and worth more.
Web Reference:  http://GailGladstone.com
0 votes
Mitchell Fel…, Agent, Brooklyn, NY
Sun Mar 6, 2011
Dear Anne:

Just because a person is buying a house all cash does not mean they will be flipping the house. If that is something that you are concerned about you should just ask the buyer. Often times when an investor purchases a home with the intention of flipping the property they will want to place a clause in the sales contract adding the verbiage "contract vendee." Having this clause in the contract will allow the investor to sell the contract itself to another purchaser and make themselves money without having to actually close. If the buyer wants this clause in the contract they definitely have intentions of flipping the property.

On a side note, you need to make sure the deal is actually all cash. You need to see proof of funds. Often times a buyer may state they are purchasing all cash but really they are going for a mortgage. The difference is that normally when a buyer gets a mortgage there would be a mortgage contingency in the contract stating that if the buyer gets denied the mortgage, the deal would falter and the buyer would get their down payment back. If a buyer seeking a mortgage goes into contract WITHOUT an actual mortgage contingency, it means that if they get denied the mortgage the deal would falter and they would also LOSE their down payment. Professional investors may be willing to take that risk because they feel certain that they can get the mortgage, but you need to be careful because if the buyer is getting a mortgage, whether or not they have the contingency they would still need to actually get the mortgage in order to close.

Having said that, whether or not a buyer wants to flip your property is not important in and of itself. The more important factor is "am I getting enough money for my property?" The best way to make sure you get the highest price possible would be to have your home professionally marketed by a licensed real estate agent and/or realtor. Only a real estate agent can give you the highest level of exposure and it is a statistically proven fact that homes sold by real estate agents go for higher prices. Plus you would have someone guiding you through the process step by step and taking care of everything along the way. Even if you do not want to hire a real estate agent, you should at least have a couple of agents come by your home to give you a Comparative Market Analysis. That is when the agents provides you with some comparable sale information (similar homes sold in your area) and offers you an opinion of how much your homes is worth. If you do that you can avoid making a big mistake! If you like I could provide you with that service free of charge and with no obligation. My office is located in your area and I have been in the business for 18 years.

Aside from that, if you want to get the buyer to offer a higher price, just tell them you want more and give them a counter offer. But be prepared, you also run the risk of losing the buyer! If I can be of further assistance please let me know. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes
Donna Wisnie…, Agent, Annapolis, MD
Sun Mar 6, 2011
I am assuming that you are asking this question because you do not have an agent to represent your best interest in one of the biggest investments of your life!You want to receive an offer that has the best terms in the offer to purchase.Therefore cash offers are not always the best offer. If you do not have an agent, than it is in your best interest to hire one to represent your best interest even if it just for this one transaction. Negotiation strategies is one of the tools and techniques that an agent has developed and is the reason that sellers hire a real estate broker. Statistics have shown that sellers net more money by working with real estate broker. Best of Luck!
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sun Mar 6, 2011
Do you have an agent, and if so what is he/she suggesting...you could consider a counteroffer or simply refuse the current offer....did you review comps--recently sold similar properties in the immediate area--if not consider doing so before counteroffering...
0 votes
Eli Givoni-S…, , Boca Raton, FL
Sun Mar 6, 2011
Make them a counter-offer.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states
0 votes
Karen Parsons…, Agent, Laguna Beach, CA
Sun Mar 6, 2011
Hi Anne,

This is pretty typical for cash offers, they think that because they can close quickly and there are no lender headaches they can offer less than others....and that's all true. But that being said, if you have solid comps to back you up, and the willingness to let them walk away, counter them reasonably and let your agent do their job. Sometimes it's just to see what they can get, and if they love the home....even if it is an investment...they might come up.

Good luck,

Karen
0 votes
Christopher…, Agent, Tarrytown, NY
Sun Mar 6, 2011
Hi, just respond to your buyer with a counter offer. Keep the tone of the negotiation pleasant and be careful you don't give away any info that can hurt your negotiating postion. Remember that cash is king because all you need is clear title and you can close. I would think carefully about the offer you received before you decide.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
914.406.9023
Web Reference:  http://raveis.com/chrispagli
0 votes
Pam Bava, Agent, Rochester, MI
Sun Mar 6, 2011
Hi Anne,

Have you or your agent (I hope you are working with one) looked at the comps in the area.

Also, does your home need any repairs or updating? If the buyer has to put alot of money into it that could be the reason the offer is low. We really don't have enough information here to give you a good answer.

Good luck
Pam Bava, Realtor
Web Reference:  http://www.pambava.com
0 votes
Charles D'Al…, Agent, Brooklyn, NY
Sun Mar 6, 2011
Ann I am Charles D'Alessandro of Fillmore Real Estate. Negotiating is the biggest part of real estate and has to be done properly. I would be glad to help or advise call me at 917 951-1087 anytime for free assistance
0 votes
Michael Dvor…, Agent, NYC, NY
Sun Mar 6, 2011
Anne,

We would be happy to assist you with the sale of your property.
Do not hesitate to contact us.

Michael J. Dvorkin
Brian D. Mukerjee
Licensed Real Estate Salespersons
Charles Rutenberg, LLC
917-334-8990 (Michael)
917-667-2616 (Brian)
Fax: 646-381-3644

In real estate the best thank you is a referral.
0 votes
Doc & Ellen…, Agent, San Antonio, TX
Sun Mar 6, 2011
First of all, why do you care if they are a flipper? You just want to sell your house at the highest price possible - it doesn't matter what the Buyer wants to do.

Some Buyers think that, because they have Cash, they are entitled to a big discount. That depends on how much of a hurry you are in. "ALL CASH" offers don't make any difference except that you can sometimes close faster because there is no lender underwriting or appraisal process to go through. Other than that, when you leave the closing table, the money isn't labeled any differently. It's all cash to you.

So, if you're not in that much of a hurry, thank them for the offer, explain the market value of the home with real comparables, and invite them to offer you market price. Many times, a lowball offer is just an opening gambit - no one wants to pay too much. If your agent is a skilled negotiator, often that low offer can be turned into a good deal for BOTH Buyer and Seller.

Good luck,

Doc Stephens, REALTOR
0 votes
Jack Menashe, Agent, Brooklyn, NY
Sun Mar 6, 2011
Hi Anne:
An all cash offer is usually strong for that means the buyer does not need a mortgage. In this market sales do not often close because of bank issues whether it be appraisal or buyer credit. If your home is not listed with a realtor please feel free to reach out to me as more often than not we have a quite an array of buyers and tools at our disposal. Best of luck!

Regards,

Jack Menashe
917.797.0215
Jack@sherestates.com
http://www.SHERestates.com
0 votes
Vincent Agri, , Brooklyn, NY
Sun Mar 6, 2011
The question is how much below asking price were you originally intending to accept. The 2nd question is how high above the comps was your asking price. If you can afford to wait, then counter the offer with something you are comfortable with and if they pass, wait for the next offer that is more to your liking. Are you selling through a broker or on your own? The broker should be negotiating on your behalf, if you are selling on your own then you need to examine the quality of your property to determine if it is an easy sell or a difficult one. The items that make a property desirable are price, location and terms. If all of those conditoins are favorable, and you have had other offers and many buyers inquiring about your property then counter the all cash and see how it goes, if they refuse you can always accept the offer.
0 votes
Emmanuel Vic…, Agent, Brooklyn, NY
Sun Mar 6, 2011
iNVESTORS OR PEOPLE WHO IS BUYING CASH WILL NOT PAY FAIR MARKET VALUE ONLY BECAUSE IT S A MORE SECURE TRANSACTION BECAUSE THEY DONT HAVE TO DEAL WITH ANY BANKS WHICH ARE NOW A PAIN TO DEAL WITH, AND YOU CAN CLOSE ALOT FASTER. MY ADVICE TO YOU DONT SHOW TOO MUCH EMOTIONS AND TRY TO GET AS MUCH AS YOU CAN. MY QUESTION TO YOU IS DO YOU KNOW HOW MUCH THE HOUSE IS WORTH??? IF NOT PLEASE GIVE ME A CALL AND I"LL BE ABLE TO HELP YOU WITH THAT. 718-598-7374 CELL OR 718-484-7472 OF
0 votes
Rob Ingraham, , 14456
Sun Mar 6, 2011
Sometimes an all cash offer can save you money or time and headache.You would have to look at the offer and figure out if he is offering any saving to you.Things like not doing an inspection or no survey can save you the seller money in the long run.If you don't like the offer you don't have to except it or you can counter the offer.Never be afraid to negotiate or try to talk out a solution.It really shouldn't matter if he/she is a flipper or not but if this bothers you have a realtor run his name in the tax records and see what comes up.If he owns multiple properties then he may be an investor or a flipper.The ultimate goal is to sell at the best price possible in the least amount of time.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more