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Answers (28)
- margo kenney, "margok"
- Contributions:3
Cash definitely gives you an advantage. Cash is king right now, because
one of the big unknowns in an offer on real property is the ability of the buyer to get the loan funded. If you can give proof of funds, your offer can succeed over another offer that might be higher in purchase price or contain better terms for the seller.
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one of the big unknowns in an offer on real property is the ability of the buyer to get the loan funded. If you can give proof of funds, your offer can succeed over another offer that might be higher in purchase price or contain better terms for the seller.
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- nagirl1990
- Contributions:2
I am looking for homes for cash, any suggestions?
- Pat Bourgo, "Pat Bourgo"
- Contributions:1051
YES
- Tim Haag, "Tim Haag 1"
- Contributions:52
The willingness of sellers to accept any contingency depends on (1). the urgency of their need (or desire) to sell, (2). whether they are in a buyer's or seller's market, (3). how attractive other buyers' offers look and (4). if there are no other offers, whether negotiating an offer with a contingency seems better than not having an offer to negotiate.
- Sheri Moritz, "SheriMoritz"
- Contributions:269
EKurtz - I am sorry for the agent bantering. I work in your area and specialize in working with cash buyers mostly purchasing investment properties. I have sold over 1500 homes in the Triangle area and can answer your question and how cash impacts your offer in our specific market. Please feel free to contact me and I am happy to assist you. There are several advantages to purchasing cash.
On a side note to the agents... There is no chance a cash contingency would fly. Of course a buyers agent can submit anything they want on behalf of the buyer but like others have said there is no way a sellers agent should let their seller sign that. If you are planning a cash offer you best have the cash or be ready to cough up your earnest money to the seller for wasting their time if you don't.
On a side note to the agents... There is no chance a cash contingency would fly. Of course a buyers agent can submit anything they want on behalf of the buyer but like others have said there is no way a sellers agent should let their seller sign that. If you are planning a cash offer you best have the cash or be ready to cough up your earnest money to the seller for wasting their time if you don't.
- Jeff Konstant, "jkonstant"
- Contributions:1970
Please give me/us an example of a cash contingency.
- Tim Haag, "Tim Haag 1"
- Contributions:52
Michael...in NC, the standard "Offer to Purchase and Contract" has a paragraph for "Other Provisions and Conditions" where the "cash contingency" can be written. Or, the contingency can be provided on an addendum and cited in the Other Conditions or Provisions paragraph. Either way, the language must be drafted or reviewed by an attorney.
- Michael Emery, "MikeEmery"
- Contributions:7286
Not to stir the pot, or feed the flames, or...whatever.
I have to admit I've never heard of a 'cash contingency' nor is that form in the drawer at the office.
Is a cash contingency written into the contract common?
I have to admit I've never heard of a 'cash contingency' nor is that form in the drawer at the office.
Is a cash contingency written into the contract common?
- Tim Haag, "Tim Haag 1"
- Contributions:52
Roberto...my only regret is that I let myself get sidetracked by your insults and sarcasm, rather than staying focused on the real issue...i.e. the original question. I believe this has been a disservice to EKurtz, when all he or she asked for was an answer, not a sideshow. I apologize for my part in the sideshow.
- Robert Walker, "So Cal Agent"
- Contributions:1425
If you pay in cash, yes it can give you an advantage, but don't think that you are the only one out there with cash. My partner deals exclusively with cash buyers and she is frustrated and heck when she counsels her client to come in $30K to $40K above list price and still gets out bidded by the numerious cash buyers out there.
You can also pay cash to get you that advantage and then refi after you get the home to get get your cash back in your pocket.
You can also pay cash to get you that advantage and then refi after you get the home to get get your cash back in your pocket.
Tim Hag: "I've decided not to continue feeding your insecurities..."
So, you can't answer the three reasons I have given, now corroborated by other agents, that often a cash offer will have more leverage with some buyers? Instead you opted for continuing to insult me? You are very classy and well educated and it shows...
Yes, a cash offer, of course proven with a statement from a bank, and an earnest money deposit to the right buyer is the strongest offer possible. In many cases, it will be taken over a higher offer with a loan depending on the seller. [ no appraisal contingency, no financing contingencies, quicker closing potentially ]
So, you can't answer the three reasons I have given, now corroborated by other agents, that often a cash offer will have more leverage with some buyers? Instead you opted for continuing to insult me? You are very classy and well educated and it shows...
Yes, a cash offer, of course proven with a statement from a bank, and an earnest money deposit to the right buyer is the strongest offer possible. In many cases, it will be taken over a higher offer with a loan depending on the seller. [ no appraisal contingency, no financing contingencies, quicker closing potentially ]
- Myersteam_1
- Contributions:571
An all cash buyer gives the seller more confidence that the property will close. Provide proof of funds and your offer looks stronger than another contingent upon financing.
- Isklopot
- Contributions:36
azrob--we all make assumptions when we answer questions--my assumption is that the choice is between cash and a sound mortgage, not between cash and a hope to secure financing once an offer is accepted (and if the offeror is able to pay cash I'd think his ability to secure financing is about as close to a certainty as you'll get). Given a choice between someone with cash in hand versus someone with sketchy financing yes, the cash in hand offer has an advantage and could propose a discount--which the seller may or may not accept, depending on his need to sell immediately to the offerer in question at a reduced price. (The question in my mind as the seller--would the potential buyer walk if I didn't accept a price reduction if he paid in cash?)
I don't see cash in hand as being any better than someone with secure financing--something that could be readily checked out with a few questions/requests for information. Perhaps here is where a competent REA would be of value in the process. I do know that every time I've bought a house for cash I've had to prove that I did indeed have the funds to close the deal and wasn't spoofing the process--no one accepted that I had the funds without verification.
FWIW, a dozen years ago I almost wasn't able to go to settlement on a cash purchase when the bank put a two week (10 working day) hold on my deposit from another financial institution. I had liquidated some investments and deposited the brokerage check in my bank to get the required cashier's check for closing (and the check was from a well-known financial entity, not Fly-By-Night Investments Inc). Because of the value of the deposit the bank put a hold on it until they were confident the funds had been transferred to them, plus a safety factor--something the local branches had earlier stated wouldn't happen and that hadn't happened in previous purchases. I spent a busy day escalating the problem until I ended up dealing with the home offices of a major national bank to sort it out, barely meeting the closing date. Cash transactions can have problems, too.
I don't see cash in hand as being any better than someone with secure financing--something that could be readily checked out with a few questions/requests for information. Perhaps here is where a competent REA would be of value in the process. I do know that every time I've bought a house for cash I've had to prove that I did indeed have the funds to close the deal and wasn't spoofing the process--no one accepted that I had the funds without verification.
FWIW, a dozen years ago I almost wasn't able to go to settlement on a cash purchase when the bank put a two week (10 working day) hold on my deposit from another financial institution. I had liquidated some investments and deposited the brokerage check in my bank to get the required cashier's check for closing (and the check was from a well-known financial entity, not Fly-By-Night Investments Inc). Because of the value of the deposit the bank put a hold on it until they were confident the funds had been transferred to them, plus a safety factor--something the local branches had earlier stated wouldn't happen and that hadn't happened in previous purchases. I spent a busy day escalating the problem until I ended up dealing with the home offices of a major national bank to sort it out, barely meeting the closing date. Cash transactions can have problems, too.
- Tim Haag, "Tim Haag 1"
- Contributions:52
I've decided not to continue feeding your insecurities.
It's sad that you apparently have such low self esteem. Otherwise, you might have a more positive and confident view of yourself, the world and your little niche.
As a result, you wouldn't feel so threatened by other people and their opinions.
It's sad that you apparently have such low self esteem. Otherwise, you might have a more positive and confident view of yourself, the world and your little niche.
As a result, you wouldn't feel so threatened by other people and their opinions.
interesting that you would bring up "proving competence..." I'd say given this thread and your advice, you might hang your hat on something else...
- Tim Haag, "Tim Haag 1"
- Contributions:52
Roberto...have you ever considered proving your competence through knowledge, professionalism and courtesy for others' opinions rather than through petulant juvenility?
Tim, good luck writing a cash offer, with a cash contingency!
"I'm paying cash, but if I don't have the cash, i can cancel!" You should leave real estate and do stand up comedy!
NO sellers agent would accept that. What I don't know is if you actually think you can write that offer and get it accepted, or if you are merely trying to appear knowledgeable to anyone reading this, but either way, its comedy.
Do cash offers make a difference? Lets examine say a dozen different threads here on zillow over the past few months, with titles such as:
1. help my loan isn't closing on time!
2. My loan suddenly got denied!
3. I keep losing out to investors paying cash...
If cash offers didn't matter, then why do we keep seeing these threads?
"I'm paying cash, but if I don't have the cash, i can cancel!" You should leave real estate and do stand up comedy!
NO sellers agent would accept that. What I don't know is if you actually think you can write that offer and get it accepted, or if you are merely trying to appear knowledgeable to anyone reading this, but either way, its comedy.
Do cash offers make a difference? Lets examine say a dozen different threads here on zillow over the past few months, with titles such as:
1. help my loan isn't closing on time!
2. My loan suddenly got denied!
3. I keep losing out to investors paying cash...
If cash offers didn't matter, then why do we keep seeing these threads?
- Tim Haag, "Tim Haag 1"
- Contributions:52
Well, of course the contract becomes null and void if the buyer does not have the cash. However, the cash contingency would allow the buyer to get his or her earnest money back. So, from the seller's perspective, what makes the cash buyer any more attractive than the buyer who can't get their loan?
yeah sure... "should the buyer not actually have the cash he said he has, this contract is canceled"
good luck with that one!
Tim, please stop! I'm laughing too hard now!!!
good luck with that one!
Tim, please stop! I'm laughing too hard now!!!
- Tim Haag, "Tim Haag 1"
- Contributions:52
azrob...a smart buyer's agent would never let his or her cash buyer enter into a contract without a cash contingency. Where I live, a cash contingency is just as viable as a loan contingency...or, for that matter, any other contingency.
And ironically, today we have a thread with multiple buyers having trouble getting there loans. Their transactions may not close on time, if at all...
link
But no, cash doesnt make this any better! hilarious!
link
But no, cash doesnt make this any better! hilarious!
Yes, this would be why most contracts/offers have a "loan contingency" where the buyer can cancel the contract and get their earnest money back, should they not actually get the loan.
They don't have a "cash contingency" if the cash fails to materialize, they lose the earnest money.
So yes, a cash offer is more secure, especially with a large earnest money deposit.
Is this real estate education for those who don't know much day?
They don't have a "cash contingency" if the cash fails to materialize, they lose the earnest money.
So yes, a cash offer is more secure, especially with a large earnest money deposit.
Is this real estate education for those who don't know much day?
- space_acer
- Contributions:4311
Never state to anyone your going to be paying in cash.
else they will assume you have additional you can payout
and hike the price higher to scam you into paying more.
else they will assume you have additional you can payout
and hike the price higher to scam you into paying more.
- Tim Haag, "Tim Haag 1"
- Contributions:52
Some sellers think a cash buyer is more secure than a buyer who is borrowing money for the purchase. Whether or not that gives the cash buyer any edge, over buyers who need loans, is arguable. Most sellers with whom I have worked take the viewpoint that, at the closing table, cash is cash, whether it's liquid cash or borrowed cash.
Smart sellers know that cash now does not guarantee cash when it's time to close any more than a borrowing buyer can guarantee funds to close.
At a minimum, sellers need to require verification of a cash buyer's funds, just as they would require a pre-approval letter from a borrower. Neither way guarantees that either buyer will actually have a penny to close with. Cash buyers can "lose" their cash easier than borrowing buyers can claim inability to close their loans. So, unless the buyer is willing to provide verifiable documentation that the cash has been placed in a trust account made payable to the seller at closing, his or her cash is no better than the borrower's cash...and offers no more guarantee of availablity than can be provided by the borrowing buyer.
Smart sellers know that cash now does not guarantee cash when it's time to close any more than a borrowing buyer can guarantee funds to close.
At a minimum, sellers need to require verification of a cash buyer's funds, just as they would require a pre-approval letter from a borrower. Neither way guarantees that either buyer will actually have a penny to close with. Cash buyers can "lose" their cash easier than borrowing buyers can claim inability to close their loans. So, unless the buyer is willing to provide verifiable documentation that the cash has been placed in a trust account made payable to the seller at closing, his or her cash is no better than the borrower's cash...and offers no more guarantee of availablity than can be provided by the borrowing buyer.
actually, the seller often does care where the money comes from, because not suprisingly, sometimes the loan never happens and the deal gets cancelled.
Isklopot, here is an idea: when you don't have a clue about something, don't answer...
Isklopot, here is an idea: when you don't have a clue about something, don't answer...
- Isklopot
- Contributions:36
I think your question is will the seller give you a reduction in price if you pay cash--the answer is probably not. The seller doesn't care where the money to pay him off comes from--you or a mortgage company/bank--because money is money. It's not as if he has to pay a credit card-like commission if his proceeds come from the mortgage company/bank.
- Jeff Konstant, "jkonstant"
- Contributions:1970
I take it from your question, you are looking to see what advantage as a buyer you would have over other buyers. The short answer is yes. There are fewer hurdles to jump which tends to put the whole process into high gear right away and ease the seller's minds. The seller should know that there are no lender issues that could cause delay or failure. However, this does not mean a seller will necessarily look at your offer any better if the numbers are so off to them. While I have no fast and hard numbers handy for your area, for example, you may be able to research the list price vs sold price percentages for cash and financed sales and determine that cash offers/sales have sold for 92% of list while financed have sold for 94% of list or any other numbers.
- Nancy Lee, "An OrderLee Home"
- Contributions:1195
Let's see....you don't pay thousands of extra dollars in interest, you don't have to worry about foreclosure, if something happens and you have to sell (even of you sell for less than you originally paid) almost all of the money goes into your pocket, stress levels go way down because your cost of living goes way down, you don't have to hassle with computer or paper work mix-ups...personally, so far this year I have gone to Hawaii, taken a cruise in Europe, am planning an Alaskan cruise this fall, and am still putting most of my income into savings. On the downside, you don't get the tax benefit....but if you could afford monthly payments, you should have no trouble saving enough to cover taxes in a very short time, just don't forget to do it.
Advantages of paying cash?
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