Selling house - anyone been burned by a cash offer?

[escrow]

We listed our rental over the weekend and had seven different offers. One of them is a guaranteed cash offer $10k over asking price with a close date of before the next mortgage payment is due. My realtor has been burned by one of these but obviously if it goes through that is $ in our pockets. We have another really strong offer (and the couple even wrote us a letter) but it will be subject to what the house appraises for. We have an hour to decide

[sunshineluv]

Did your realtor give any more detail? To me that is a no brainer, take the cash offer. If you are nervous, get them to provide more earnest money to protect you. Sounds like you are in a hot market.

[monsterz]

Generally with cash offers the buyer has to show that they actually have the funds to purchase the home in cash. I have heard of people getting burned as the buyer didn't actually have the cash to purchase the home. When we got a cash offer our realtor requested documentation of some sort as validation. I think it was only something the realtor was allowed to see I don't remember that being forwarded onto us.

[lys]

Jun 29, 2015 12:16:40 GMT -5 monsterz said:

Generally with cash offers the buyer has to show that they actually have the funds to purchase the home in cash. I have heard of people getting burned as the buyer didn't actually have the cash to purchase the home. When we got a cash offer our realtor requested documentation of some sort as validation. I think it was only something the realtor was allowed to see I don't remember that being forwarded onto us.

This

[msmerymac]

The good thing about a cash offer is that there's no financing contingent - as long as they prove they have the cash, they're good. No risk of the mortgage company backing out or not approving the sale price, which is one less way for the sale to be canceled. Also, as you said, they don't have to care about the appraisal.

[escrow]

They have proof of funds. We just worry that they are writing several offers waiting for one to get accepted then back out based on inspections. I am in the Denver area. It is crazy now.

[ijack]

Jun 29, 2015 12:32:42 GMT -5 escrow said:

They have proof of funds. We just worry that they are writing several offers waiting for one to get accepted then back out based on inspections. I am in the Denver area. It is crazy now.

It's insane how hot our market it!! I would assume that there is a realtor out there who has been burned by any kind of offer. We sold our townhouse to a person who offered cash and it was super easy and I know they're pretty popular in our neighborhood right now too.
Where are you moving?

[escrow]

Jun 29, 2015 12:40:35 GMT -5 ijack said:

Jun 29, 2015 12:32:42 GMT -5 escrow said:

They have proof of funds. We just worry that they are writing several offers waiting for one to get accepted then back out based on inspections. I am in the Denver area. It is crazy now.

It's insane how hot our market it!! I would assume that there is a realtor out there who has been burned by any kind of offer. We sold our townhouse to a person who offered cash and it was super easy and I know they're pretty popular in our neighborhood right now too.
Where are you moving?

We aren't moving, we somehow timed this whole thing perfectly and bought in 2013 and have been renting out this other house for the last two years. So we don't have to turn around and find a house to live in, so lucky!

The cash offer is from an investor who intents to continue renting the house out. They have to have property "acquired" by a certain date in order to not pay taxes on it (they sold another rental and need to turn that profit around into more real estate asap). We are worried that they just threw a bunch of offers out there to see what would stick. 

The other offer is for more actually, the buyer is already approved and they have 20% down and will buy "as-is", and they are expecting and have been making offers for over a year. I think we are actually going to go with them, we are less concerned with them bouncing at the last minute. And they totally got me with their little letter and photo. Fingers crossed!

[monsterz]

Jun 29, 2015 12:32:42 GMT -5 escrow said:

They have proof of funds. We just worry that they are writing several offers waiting for one to get accepted then back out based on inspections. I am in the Denver area. It is crazy now.

The market here is insane and I am glad as we go on the market this week.  We bought less than 2 years ago and I am shocked at what we are listing at.  

[ijack]

Jun 29, 2015 12:46:41 GMT -5 escrow said:

Jun 29, 2015 12:40:35 GMT -5 ijack said:

It's insane how hot our market it!! I would assume that there is a realtor out there who has been burned by any kind of offer. We sold our townhouse to a person who offered cash and it was super easy and I know they're pretty popular in our neighborhood right now too.
Where are you moving?

We aren't moving, we somehow timed this whole thing perfectly and bought in 2013 and have been renting out this other house for the last two years. So we don't have to turn around and find a house to live in, so lucky!

The cash offer is from an investor who intents to continue renting the house out. They have to have property "acquired" by a certain date in order to not pay taxes on it (they sold another rental and need to turn that profit around into more real estate asap). We are worried that they just threw a bunch of offers out there to see what would stick. 

The other offer is for more actually, the buyer is already approved and they have 20% down and will buy "as-is", and they are expecting and have been making offers for over a year. I think we are actually going to go with them, we are less concerned with them bouncing at the last minute. And they totally got me with their little letter and photo. Fingers crossed!

That's the perfect scenario!! We dream of the profit we could make on our house, but we have no where to go! Congrats!

[aurora]

I thought cash offers were supposed to be the strongest (because of no financing contingency, no worry about the bank and appraisal, etc.) I would think that someone getting traditional financing could also try to make multiple offers and back out at inspection, too, so I don't see this being different (although I still maintain that most people wouldn't do that since inspections cost $).

[marshamarsha]

As someone who gave up trying to buy a house because we couldn't compete against all of the crazy cash offers in this market I would encourage you to go with the couple with the non cash offer. It's so discouraging to continually lose against investors who won't actually live in the house but have all the cash.

[loreleigilmore]

I'd go with whoever is offering more money. It's a business decision. If the other party is pre-approved, I'd take that one!

[AAM2012]

Why would they need an appraisal BirdGirl if it's cash offer?


A few people I know have had really good results with cash offers.

[vanillacourage]

Since there is no appraisal and financing to put together (which is usually what drags out escrow) I'd ask that they schedule the inspection within 48 hours and require either request for repairs or waiving of the inspection contingency the next business day. Then I'd tell your other offers you will respond to their offer whenever the other offer's time limit runs out. 

[ellipses84]

Jun 29, 2015 12:32:42 GMT -5 escrow said:

They have proof of funds. We just worry that they are writing several offers waiting for one to get accepted then back out based on inspections. I am in the Denver area. It is crazy now.

This happened to us last year. The way the buyer backed out at inspection for insignificant things we were willing to pay for made no sense. We later found out through a good neighbor friend they had put an offer on another house at the same time. They were only out the inspection fee and we were out several weeks on the market.

[escrow]

Jun 29, 2015 14:43:21 GMT -5 marshamarsha said:

As someone who gave up trying to buy a house because we couldn't compete against all of the crazy cash offers in this market I would encourage you to go with the couple with the non cash offer. It's so discouraging to continually lose against investors who won't actually live in the house but have all the cash.

This is what we did

[escrow]

Jun 29, 2015 23:44:42 GMT -5 ellipses84 said:

Jun 29, 2015 12:32:42 GMT -5 escrow said:

They have proof of funds. We just worry that they are writing several offers waiting for one to get accepted then back out based on inspections. I am in the Denver area. It is crazy now.

This happened to us last year. The way the buyer backed out at inspection for insignificant things we were willing to pay for made no sense. We later found out through a good neighbor friend they had put an offer on another house at the same time. They were only out the inspection fee and we were out several weeks on the market.

This is what our realtor said exactly. The couple wants to live in our house and make it their own, the investor just needs "a house". The offer is the same anyway, and "as is", hopefully meaning they won't nickel and dime us on inspection items.

[delawarejen]

Jun 30, 2015 9:35:07 GMT -5 BirdGirl said:

Jun 29, 2015 23:55:08 GMT -5 escrow said:

This is what our realtor said exactly. The couple wants to live in our house and make it their own, the investor just needs "a house". The offer is the same anyway, and "as is", hopefully meaning they won't nickel and dime us on inspection items.

Are they doing an informational inspection? Because "as is" to me means no inspection contingency. Well actually, "as is" usually means an "as is" clause in the contract, but I have no idea why a buyer would agree to that if you didn't list it "as is."

Her market is so hot that the potential buyers are waiving the inspection contingency, but they're getting financing. The mortgage company will want the inspection, so they can confirm they're not making a risky loan by financing a house with significant issues.