How much of an advantage is an all cash offer?

David714_IHB

David714_IHB

New member
I'm curious as to how most sellers view these offers. Is an all cash offer X% below asking price more than attractive than a typical 80/10/10 or 20% down offer at asking price? If a buyer is willing to pay cash they should expect a little more sweetness in the deal. How much sweetness, X, can be expected? Obviously this varies w/each home and area, but I'd love to hear about some real world examples if anyone has any.
 
[quote author="David714" date=1257929413]I'm curious as to how most sellers view these offers. Is an all cash offer X% below asking price more than attractive than a typical 80/10/10 or 20% down offer with a financing contingency? If a buyer is willing to pay cash they should expect a little more sweetness in the deal. How much sweetness, X, can be expected? Obviously this varies w/each home and area, but I'd love to hear about some real world examples if anyone has any.</blockquote>


All cash offers at trustee sales certainly go for much less than when they are listed.
 
From what I've observed, sellers like all cash, no contingency offers at asking price (or better). If the bid is below asking, then it's not as appealing.



Most of us cannot afford all cash offers, so you gotta work harder to get the deal in a competitive market.
 
I can't speak to "all-cash", but we offered 50/50 (cash/loan) to a probate sale (and offered about 6% over asking) but were outbid by a FHA that went almost 13% over asking. In this case, the irrationality of a government subsidized down payment overruled our hard-saved $$$. Oh well....place required too much work.



This is a great question, though. I'd really appreciate answers from the sages of this forum (thanks in advance).
 
Having dealt with several sellers, including lenders (REO). I can say that putting over 20% down does have an advantage over someone putting down 20% or less, especially if the sale prices are close. That being said, I have noticed that lenders on REO listings will take a lower sales price because they don't have to deal with the buyer getting an appraisal. For example, one of my buyers had the highest offer on 126 Arden over in Northwood Pointe (REO) of $735k and the bank went with the 5th highest offer of $700k which was all cash. The other benefit for sellers with an all cash offer is that they can close within about 2 weeks. I guess it all comes down to the sellers.
 
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