Be smart with your cash |

Be smart with your cash

We are seeing a lot of cash offers these days in all price points. Regardless of the price range there are two types of cash offers being made. The first is the one that is substantially less, up to half, of the list price. The other is the strong offer close to the asking price. Both have their benefits to buyer and seller depending on their circumstances.

If you are shopping with cash make sure you understand what you want before you enter the market. Your agent should be able to help you understand your wants and needs and where to find it in the marketplace. Want a good buy? Make sure you understand today’s property values. With a good understanding of value you will know if a property’s list price is accurate. With that knowledge you can approach your offer with confidence knowing the likelihood of it being accepted.

Properties that are priced right are not conducive to predator offers. If a short sale, it’s important to know that even if the seller accepts your offer, the lender that must approve a short payoff will inevitably counter the price. You can end up with a good buy with a short sale, but not at half, or even 75 percent of true market value. Cash and quick close has little bearing in a short sale. If a conventional sale, the seller is not distressed and there is little motivation to accept an exceptionally low offer.

Cash buyers are often competing for the same property. We recently received a cash offer 27 percent less than the list price that was followed the next day by another cash offer 3.8 percent less than the list price, similar terms and conditions. Then came the offer from the buyer needing a loan at 1.5 percent under the list price. Another recent multiple offer situation had a cash offer 54 percent less than asking, a cash offer 16.67 percent below asking and an offer 7.4 percent off the price asking for the owner to carry. In both instances the higher of the cash offers was accepted.

Cash is clearly helping people get a good buy on the property they want. The super buys are not generally available in the open market when you have a “willing seller,” or the need to have lender short payoff approval. Remember, too, that the list price is not a target to shoot at with a predetermined price reduction formula in order to affect a good buy. If the property is 20 percent overpriced and you offer 20 percent less than the list price, then you are paying full price, not getting a 20 percent cash reduction. Cash buyers generally get concessions and preference, within reason.

“Cash is king” has long been the refrain when making and evaluating an offer, but flashing your cash doesn’t mean you’re going to steal the property. Don’t be bashful, however, about offering a “princely” sum and getting what you want rather than missing out. Make your offer according to your desire to own the property you are offering on. If you really want it there is a good chance that somebody else does as well. Use your cash to compete well, and make sure it gets you the home you want. Two of the above buyers are moving while the others are still shopping. Make your cash offer reasonable and you’ll be moving, not shopping for that special seller that may, or may not, be out there.

Lisa Wetzel and Jim Valentine are real estate agents with RE/MAX Realty Affiliates in Gardnerville. They are short sale and foreclosure specialists and certified distressed property experts. Contact them at