What % can I negotiate when buying a property cash ??

[Helpinvesting]

I'm wondering... If I buy a property in the near future and I have cash how much can I lower it ?

Per instance If the house is 100k ... What would be a reasonable offer ?

Thank you !!!

[snafu]

Real estate is one of the most capitalistic transactions since it takes a willing buyer and a seller negotiating the offer back and forth, often via a realtor, until agreement is reached or one of the participants walking away. It has nothing to do with how much cash the buyer has available. The seller gets the entire sum less realtor fees, legal fees, sums or liens charged against the property etc.

Working out an offer is difficult and is often based on a complicated relationship between value of the land, how the buyer values the structure[s], square footage, recent sell price of similar properties in that community, community services, tax assessments, materials used, appliances and extras a buyer requests. So many people make offers to buy based on emotional response. My realtor friend believes people make an offer to buy a home because they like the seller's furniture while intellectually they know the furniture leaves with the seller. She feels women particularly expect every place they see will be 'move-in ready..' Buyers can save huge sums over the period of a mortgage buying properties that need minor updates/upgrades.

I suggest hiring a very experienced real estate agent who works in the area you wish to buy. They work for you and will negotiate the best possible deal to ensure they get their commission.

[disneysteve]

It has nothing to do with how much cash the buyer has available.

I don't think this is entirely true.

It depends on the seller. It depends on the market conditions. It depends on how long the house has been listed. It depends on how anxious the seller is to sell.

We didn't buy for cash but we were pre-approved and had no continency requests because we weren't selling a property. That meant that if they took our offer, we were set. The sellers had already had 2 previous contracts fall through after the potential buyers either failed to get financing or couldn't sell their own homes so they backed out. So by the time we entered the picture, they were looking for a deal that would stick. Walking into that situation with a bag of Benjamins probably would have been very welcomed and would likely have gotten us an even better price than we got.

[creditcardfree]

I will say that snafu and Disney Steve are correct. Generally, in our area of the country homes tend to sell for about 97% of list price. There are always exceptions, but I wouldn't say that you are going to get a deep discount for cash. However, I would agree not having to bring loan approval to the table is in your favor over other buyers.

[Helpinvesting]

Thank you Steve, Snafu And ccfree

Thank you for taking the time to answer ...

Are you guys in CA?

[disneysteve]

Are you guys in CA?

I'm in New Jersey.

[creditcardfree]

Thank you for taking the time to answer ...

Are you guys in CA?

No, currently in Iowa.

[bjl584]

I'm wondering... If I buy a property in the near future and I have cash how much can I lower it ?

Per instance If the house is 100k ... What would be a reasonable offer ?

Thank you !!!

It's impossible to say. It really depends on the market and on the seller. In a hot market where homes sell quick and sellers can expect multiple offers, a cash offer may or may not be enticing.

[Fishindude77]

There is no answer to this question.

However, having cash to make the purchase means you can do the deal very quickly without the normal loan approval wait time or special "pending financing and inspection" terms thrown in. You should also feel good knowing you can buy it at your price, or walk away. No big deal, you have the cash and can go down the road and find something else.

My suggestion would be to make the first offer real low (at least 25% under asking price), letting them know you are prepared to close immediately. There is an outside chance the seller is in a real time or money pinch and will take your offer. Worst case, they reject your offer or come back with a counter.

You can't go back down in price after an offer is made, but you can always up your offer if rejected. This is the ideal position to be in.

There is also a chance the seller is in the same position with property paid for and has his mind made up that he's not selling till he gets his price. At least by starting real low you can haggle back and forth to get his true bottom dollar selling price.

Good luck !