I make a lot of real estate videos, but not all of them make the cut and get published on my YouTube channel. In this video, for instance, titled Will I Get a Better Deal if Pay Cash for a House, I answer the question in the title but then proceed to ramble on and make several other points too along the way that are, well, irrelevant.
Let me take this opportunity to remind you my videos are unscripted, and just like everyone else sometimes I get off track lol!
So I decided not to publish this one. At least until now. Because it is interesting for anyone thinking about going over list price on a foreclosure home.
“I had a home buyer looking for a great deal on a house in Northwest Albuquerque, and we saw this one come on the market and we went out and took a look at it. It was a foreclosure home and he said “wow, this one’s got everything I’m looking for” and it had new carpet and fresh paint, it was a great little house and I told him “wow, the price on this thing is outrageously good, if you think this is the right house for you we should make an offer right away.” I usually don’t talk like that but this one was obviously a good deal.
So we parted ways in the driveway , the plan was to go in at list price and just try and lock that down. But as I was pulling away one of the neighbors came over and I rolled down my window and he said “hey, just a hypothetical question for you, if, let’s say someone made an offer on that house, or made an offer on a house, and it was a cash offer would that cash offer have more weight than a financed offer?”
And I told him well, yes, if they were for equal amounts they’s probably give the nod to the cash offer because the seller doesn’t have to pay for an appraisal, an it takes the uncertainty of the loan process out of the transaction and probably allows that buyer to close a couple of weeks earlier.
So he said let me come clean, my in laws made a cash offer on that property last week and they haven’t heard anything back yet. And I was like, oh ok, thanks for telling me, and I was like do you like your in-laws and he said oh yeah I love them they’re great people and I was like ok, great, thanks for the info, rolled up my window, drove down the street and f course I called my buyer client right away and told him “wow, I now know they have other offers, at least one other offer on that property and that it’s a cash offer, so list price might not get it done.”
He said wow, I really want that house I’m going to go $5,000 over list price. I said you know what, I know this neighborhood like the back of my hand that house will appraise and it will still be a good deal.
Well, come to find out three days later indeed there were five offers on that property and guess who got it – my buyer who was decisive enough to go over list price.
There a couple of lessons to be learned here, first of all, if you see a foreclosure home in particular or any home that looks like it’s priced really well, don’t look a gift horse in the mouth offer close to list or maybe even list price. Or on a hot foreclosure that’s new on the market, you might even go over list price.
And number two would be – if you’ve made an offer on a property and you see somebody else looking at it, best to just keep your mouth shut!”
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