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There will be a mortgage payment by the buyer. The bank will give the seller the cash by check (?)
They have an agent so cash does not eliminate the 6% commission to be paid by the seller.
As is means the buyer could get an inspector but the findings are of no value due to the as is status.
The property would appraise for the selling price so no issues on buyer's bank appraisal.
No other advantages for the buyer on "cash only" beside no mortgage?
I was working on my phone and my detailed answer got dropped.
The bank giving cash by check from mortgage funding is NOT a "cash sale," as the source of the funds is a loan.
The benefit to the buyer is:
1. Notification that for some reason of condition, the house will not qualify for conventional financing.
That the seller will not entertain financing via a renovation loan.
2. That notification saves the buyer who must borrow further time and money investment. So, the buyer is informed and knows to move onto another property.
3. Commission does not matter in the equation.
4. Value at appraisal does not matter in the equation, since the house will not be financed due to condition.
5.
I am delighted that you have a buyers' agent, i.e., the "selling agent," who forwarded the information presented by the sellers' agent, the "Listing agent."
But, I am curious why your buyers' agent did not clearly explain these basic fundamental points to you?
"as is" means the seller is not willing to make any repairs as a result of an inspection. One can still walk away from the contract if the inspection turned up major issues. A buyer with a smart agent doesn't give up that possibility.
I told the selling agent we'd want an inspection to find out what is wrong "before" we could make a cash offer.
Quote:
Originally Posted by emm74
And there is every reason for a buyer to still have an inspection, because while they may not be able to negotiate concessions from the seller, they can still walk away from the deal during the contingency phase if the inspection reveals more issues than they are prepared to take on.
But why should there be any advantage to the buyer? The seller wants a cash buyer because they want to be sure that once past the contingency period, there won't be further hold ups such as the loan falling through. And while this requirement SUBSTANTIALLY limits their pool of buyers, they are entitled to that requirement.
I told the seller's agent that the owner of the property would not be asked to repair anything. Looking inside the home while the inspection is taking place would help determine a cash offer.
Quote:
Originally Posted by MikeJaquish
The benefit to the buyer is:
1. Notification that for some reason of condition, the house will not qualify for conventional financing.
3. Commission does not matter in the equation.
4. Value at appraisal does not matter in the equation, since the house will not be financed due to condition.
5. But, I am curious why your buyers' agent did not clearly explain these basic fundamental points to you?
There is no buyer's agent. I only inquired with the seller agent about a lower offer, they explained why their asking price is near fair value and they were told the seller would not be required to make any repairs after an inspection.
...
There is no buyer's agent. I only inquired with the seller agent about a lower offer, they explained why their asking price is near fair value and they were told the seller would not be required to make any repairs after an inspection.
Ah.
"Selling Agent," commonly refers to buyers agents.
Sellers' agents are "Listing agents."
The listing agent is not hired to give YOU benefits. They are there to take care of the sellers and to give up as little as possible while doing so.
The facts remain. The seller either is not taking finance offers, or the house will not qualify for conventional financing, or both.
It's not about the buyer. If seller is telling you it is cash only... that usually means there are defects with the property that would disqualify it from financing. And "as is" means they are not interested in fixing anything.
I am glad you only opined "usually". Cash Only/As Is does not "equate" with there being defects per se. It could alternatively mean that the seller does not want to be part of the drama of a conventional sale. They want a quick sale. It might be part of an estate. They don't want to fuss about imagined or immaterial defects that a seller/inspector/agent combo might come up with. The seller might invite the buyer to bring an inspector before the sale, but says up front that he will not make changes to the property nor negotiate to pay for those changes. And because inspectors can actually add minor damage during an inspection, the seller might insist on directing the inspection himself.
The house might be fine, or it might be a tear down. The buyer will just need to accept it as it is for the price that is agreed upon. Seller might ask for cash to avoid the lengthy process of under-qualified buyers failing to get loans.
Probably a small old house in a teardown McMansionizing district, that's being sold for lot value or nearly so. If you choose to buy such a house to actually live in, no seller is going to make any concessions when they have builders lined up to pay cash and who don't care about condition since they'll scrape it as soon as they can get a permit.
Furthermore, be advised that you will be somewhat limited in available financing for a house that's only worth lot value.
Howard555, I'll just say again.... I really recommend you find a buyer's agent who can help you through this process.
I'm afraid you aren't completely understanding the terms or the process and if you are dealing with seller's agents, they will not be representing your interests. A good buyer's agent would really help explain things and look out for you.
I am glad you only opined "usually". Cash Only/As Is does not "equate" with there being defects per se. It could alternatively mean that the seller does not want to be part of the drama of a conventional sale. They want a quick sale. It might be part of an estate. They don't want to fuss about imagined or immaterial defects that a seller/inspector/agent combo might come up with. The seller might invite the buyer to bring an inspector before the sale, but says up front that he will not make changes to the property nor negotiate to pay for those changes. And because inspectors can actually add minor damage during an inspection, the seller might insist on directing the inspection himself.
The house might be fine, or it might be a tear down. The buyer will just need to accept it as it is for the price that is agreed upon. Seller might ask for cash to avoid the lengthy process of under-qualified buyers
FWIW, most sellers don't want to do repairs, necessary or not, (haven't met one yet who did!) and they certainly aren't required to do repairs, even without the as-is warning. Sometimes it's just the necessary part of selling, particularly when there are small but required issues like CO detectors or water heater straps that are $5 problems that will hold up a whole sale because a lender wont lend without them.
We do though, see lots of as-is sales and cash only sales.
They usually go together but not always.
Usually it's a rehab project or bank owned. Limiting the buyer pool to cash and as-is is usually NOT considered a good strategy for a quick sale, unless it's a fixer at a very discounted price... and cash is the only sale you're going to get.
Howard555, I'll just say again.... I really recommend you find a buyer's agent who can help you through this process.
I'm afraid you aren't completely understanding the terms or the process and if you are dealing with seller's agents, they will not be representing your interests. A good buyer's agent would really help explain things and look out for you.
you say it so kindly.
I believe "falling on deaf ears" is the relevant saying here.
Here's another one: CASH ONLY DEAL SELLER WILL NOT PROVIDE TITLE.
Who does provide the title on what is a large 3 acre property with 2000 square feet home and only certain type people could pay cash for that one.
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