Suppose I’m selling my house for $800k in California. I have a buyer with a traditional financing arrangement (30 year loan) and a cash buyer. As the seller, I get my money regardless of whether a bank pays me or an individual cash buyer. Why do people get excited over the cash buyer?
In: Economics
In addition to the previous comments about appraisals, etc., another consideration is that many mortgages won’t loan money on a house that is missing certain things.. floor coverings, an exterior A/c unit, even a missing faucet could derail the mortgage process.
The house we bought could not qualify for most mortgages. It was in great shape, but one of the A/C units had been stolen. House was bank-owned and the bank’s policy was they couldn’t do “renovations”, just maintenance on the house.
We came with cash 30% under their asking price (which was already about 25% under market) and they accepted.
We are now sitting on a house that is worth 3.5x what we paid for it, after only replacing the unit, doing some painting and remodeling a bathroom.
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