How reveptive are these lenders to full Cash offers? Does this speed up the purchase of a foreclosure?

Asked by Douglas M. White, Buchanan Michiigan Sat Feb 14, 2009

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Vivian Young, Agent, Huntington Beach, CA
Sun Feb 15, 2009
Dear Doug:
As with any Seller (Bank, individual, partnership, etc.) of a home it depends on the amount offered. Lots of variables and moving parts -- no quick, clean, one size fits all answer exists. Bring your bag of cash from freezing cold Michigan to Sunny Southern California and buy a house!
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Barbara Robb…, Agent, Long Beach, CA
Sat Feb 14, 2009
I have found from my experience that with the properties that are bank-owned, the full price offer will often be the one of choice by the lender that is all cash since the lender does not have to worry about the buyer's qualification. But as these other agents have discussed, on the short sale process, it all depends as they have said on whether there is one loan or two. Who the lender is. Some I have had better luck than others, and I have one now that they are finally responding to our offer after 5 months. Every agent I have spoken to has indicated that the short sale situation is bad, and the lenders due to personnel shortages just are not responding in a reasonable time period. Even the companies that just handle negotiating the short sales for the owners are only closing 5%. It's a mess. I have found it just pays to wait until the property is foreclosed on and several of my buyers have actually gotten the property for less than when it was listed as a short sale.

I hope this information is helpful. If you would want to contact me for any other information, feel free to email me directly at

Barbara Robbins-Olex,a Broker
L B Brokerage
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Jacqueline W…, Agent, Irvine, CA
Sat Feb 14, 2009
Cash offers often indicate an investor purchase and some banks automatically think "Investor=low offer"...more so in short sales that REO properties. I guide my investor clients to write as financed with 30% down and to make sure the offer is clean. The real key to your success if making sure you are represented by a full time, professional and experienced agent who knows what works....don't make the mistake that many investors are still making in trying to represent themselves or using the Sellers agent to write the offer. Remember, banks are commercial entities and they need to be treated in a business-like manner or they may not take the offer seriously.
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Thom Colby, Agent, Irvine, CA
Sat Feb 14, 2009

The short answer is that it makes no difference whatsoever. The lenders have a process and they stick to that process no matter what form the offer comes. It's really sad but this is exactly what is causing the continuation of the housing meltdown. There are plenty of cash and / or well qualified - ready, willing and able buyers, but with most homes currently in foreclosure or short sale and the lenders understaffed it just takes too long to get offers approved.

I closed on a transaction yesterday that had been in escrow since early July 2008. I was the listing agent on the property. By the time it got approved (by IndyMac, the first mortgage holder) on New Year's eve, two buyers had already walked away. We finally got a third buyer and while waiting for the 2nd lienholder to approve they also walked away. We got a 4th buyer and by that time, IndyMac Bank had failed and was taken over by the FDIC so we had to get some additional forms completed. We finally were able to close yesterday. If we had not closed by yesterday and needed an extension, IndyMac would have begun to redice the agents commission for each extension of closing date - what incentive is that?

I have another listing right now where the first lienholder (WaMu/Chase)has agreed to pay the 2nd (HSBC) $4,000 to close, but HSBC won't accept less than $10,000. They are in a stalemate and neither will budge so that proeprty will go to Trustee Sale in early March.

I hope this helps. If you have the patience and tenacity to wait through the process, you'll get a great deal !

Thom Colby
Broker & Realtor
Orange County, CA
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Cyndi Mino, Agent, Huntington Beach, CA
Sat Feb 14, 2009
In 2 experiences I had with full cash offers, no it did not speed up the purchase. In one instance, the Lender was Countrywide and the Investor was Wells Fargo. I had 27 offers the first time. They did their BPO, and by the time they approved the sale price, every buyer had found something else, and the home had lost enough value not to make the appraisal for the buyers lender. The second time around, I had 2 full cash offers, they had to go thru the same process and the same exact thing happened. This took about 6 months. The homeowners are now going thru Loan Modification and if this doesn't work, I will be selling their home again.
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