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Friday, February 10, 2012

Home Buyer Tips–How Much Leverage, If Any, Does a Cash Offer Really Have in the Current Real Estate Market?

How much leverage, if any, does a cash offer really have in today’s Brevard County, Florida real estate market?

Phrased a little differently "Does a seller really care if it is cash offer or an offer with a reasonable down payment with financing?"

Cash is cash - period.  While the amount offered is a significant issue its specific source is not usually a significant point.

However, a seller may look at a cash offer as one less hurdle for the buyer to jump over - no financing contingency.  [Most real estate offers come with a couple of contingencies - an inspection and financing.]

The answer to the advantage gained by a cash offer, in my opinion, depends on the individual property, type of sale (short, estate) and market price.

If the property is a rehab project or has significant issues, financing may be a non-issue.  Lenders have requirements concerning habitability, etc. that must be met before a loan will be approved. [There are some loans that allow the inclusion of repair costs in the loan. Speak to a lender about these FHA loans.].

If the subject property is located in  a condo community that does not qualify for financing then cash is likely an only option. [Or perhaps owner financing]

If the sale is an estate sale you may find sellers trying to liquidate and a cash offer may be viewed more favorably.

Finally in a situation where the property is very desirable (priced right, good location) cash may gain the buyer leverage.   These are those situations I refer to as a multiple offer situations - a good place for a seller to find themselves in!

So, is cash a good strategy?  Talk to your real estate agent about the property and the circumstances of the sale.

If you are considering buying a home in Brevard County, Florida, give me a call if I can assist in any way.

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