Cash offer - should you expect a discount?

Maybrick

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Since one third of all house purchases are now apparently made with cash, I would like to ask - is it customary for the buyer to expect a discount in this situation? And if so, what kind of percentage?

After all, you are guaranteeing the seller that there will be no problems or delays with getting the bank to cough up, so I imagine this should be worth something?
 
Why?, they dont care where you get your money from. You could try the quick sale note, but it's only worth something if it is revelent to them.
 
Yes, I appreciate that. But suppose you have two bids - one offers 300 but says it could be three months before the bank releases the cash, the other only offers 290 but promises to have the money in your account by Friday. Wouldn't you give at least some consideration to taking the bird in the hand?

Anyway, I am really just asking - is there a culture of this within the industry and, if so, what is a reasonable discount to expect?
 
If there is to be a discount, I don't think it should relate to the speed at which cash becomes available: the time difference between a sale to a cash customer and one who is using mortgage finance is usually not that great.

The attractiveness to a seller of dealing with a cash buyer is the avoidance of one of the uncertainties that can scupper a transaction: the danger that the bank might not approve a loan.
 
Well, in my own opinion I would certainly think that the cash buyer would be expecting a discount .... especially given the current economic climiate. If it were me, I'd be using every conceivable angle to get a discount, and I would think paying cash is certainly one of them.

Look at the situation the other way around - if both parties offered 300k to buy your property, would you really need to think twice about which offer you would accept ?

Just my opinion, for what it's worth .......
 
Cash buyers will get a discount. Any seller in the current market knows that most potential buyers haven't a hope of getting a mortgage.
 
I think the cash buyer getting 10k off compared to the mortgage side is a great deal for the seller in the case of a 300k house. Things are dropping 1%+ per month going on the reports, so if the buyer falls through in 3 months, seller has just lost the 10k anyway.
 
if you offered 280-290 and were willing to sign within three weeks, they would be mad to let it go.
 
Thanks for those comments, very interesting. Obviously, there is no consensus on this issue. However, my personal opinion is that given the state of the market, a 2-3 per cent discount for a cash offer is perfectly reasonable.
 
what if it's CASH cash? not a check not a draft nothing going through any system, but cold hard cash.
 
... However, my personal opinion is that given the state of the market, a 2-3 per cent discount for a cash offer is perfectly reasonable.

I'd agree with that as a starting point. More if it appears that the alternative buyer might have difficulty getting loan approval; perhaps less if the alternative buyer already has loan approval in principle.
 
You can ask for a discount all you like, but there is no point in expecting it. I would expect a discount because you can complete the sale quickly, not for 'cash' as such.

A neighbour selling her house had gone 'Sale agreed' and had been bargined down a few thousand (I think, not sure of the exact details) and the buyer walked into the solicitors to sign contracts and refused to proceed unless she dropped the price again. She told him where to go and put the house back on the market, and went 'Sold' within a month.
 
I think it would be difficult establish if you are getting a discount for the cast or not. The market is all over the place right now. If the asking price was 300k what would you offer? 270k.
I am guessing any buyer would do that. You would need to know what they would accept from any buyer and then get a bit more..
 
I would imagine it also depends on the circumstances of the seller. If the amount you want to offer is below what they can afford to accept then ease of payment and speed means nothing. A lot of mortgages are for more than the house value so some sellers are very tied by a bottom price whether it is the market price or not.
 
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