Why do home sellers prefer cash buyers?

Discussion in 'Economics' started by wilburbear, Apr 20, 2010.

  1. Here's another benefit for cash buyers that enjoy, or at least, don't mind doing home improvements themselves.

    If the house needs significant work, an appraisal and home inspection will kill any opportunities for someone to buy the house with financing. Lenders are cautious about the condition of the collateral.

    I used to buy homes cash with my brothers when I was younger and we would do the work ourselves. I'm talking HUGE discounts - because only a cash buyer would be able to buy these homes - lenders wouldn't touch these houses.
     
    #11     Apr 20, 2010
  2. Talk to someone that tried to sell an old home to an FHA or VA financed buyer. Then you'll understand the benefit of a cash buyer.
     
    #12     Apr 20, 2010
  3. If you can't comment about a significant part of the market - then you don't know what the hell you're talking about.

    Here's another scenario:

    If a condo development has a disproportionately large concentration of rentals or sometimes second homes, it's difficult to get financing.

    Overall, it depends on the market and the type of home being sold/bought. A multi unit, a condo, an older home.... all these can be headaches if financing is involved.

    I was in the real estate biz for years - I have seen hundreds of closings from 30K to a million plus.

    So guess what? In my view, an approved mtg buyer is only approved when the wire from the lender makes it to the closing table.

    I have seen everything that can possibly go wrong - go wrong - whether it's a dump of a house or a McMansion.
     
    #13     Apr 20, 2010
  4. I just closed on a Duplex 2 weeks ago that we agreed to sell in September of 2009. The bank had all kinds of problems with Fannie and new regulations. Almost fell through a couple times with one of the bank's best customers. I wouldn't count on anything these days involving banks.

    If I were to do it over knowing what I know now I'd take cash at a discount for sure over someone financing (within reason).
     
    #14     Apr 20, 2010
  5. molite

    molite

    A 1.4 million $ home was up for short sale a few weeks ago for 333k. There was a little bidding war and the guy with the cash got it for 380k. House was under contract within 24hrs of listing and closed with in a week. Guys with cash are the only one getting these deals. In this market if you have cash you need to find a realator that deals in short sales and you need to be able to pull the trigger the same day a house is listed. Just like trading...know your market and don't hesitate.
     
    #15     Apr 20, 2010
  6. lindq

    lindq

    It isn't?
     
    #16     Apr 20, 2010
  7. Only if the seller is stupid
     
    #17     Apr 20, 2010
  8. Yeah and that is exactly why the pre-approved papers state that this is NOT a final approval, hence why you do not actually have the funds.

    Pre-approved means nothing to any sensible seller in this market.
     
    #18     Apr 20, 2010
  9. Funds transferred within 24 hrs? What the hell are you talking about? Do you know how a closing works? Are you aware that the loan and appraisal process can take 30 to 90 days or longer? And unless you are in an escrow state, closing should take a couple hours.
     
    #19     Apr 20, 2010
  10. Just wanted to mention that my neighbor put his house on the market yesterday and sold it today for about what it was worth. I was very surprised.
     
    #20     Apr 20, 2010