All Cash Offer

by Darrin DeRoches October 24 - 30, 2013

What is the big deal about an all cash offer? It sounds impressive and some people like to brag but does it have any advantage? An all cash offer is supposed to be exactly like it sounds. The buyer is paying cash for the property and there are no conditions of getting a mortgage arranged. There are a few agents out there who watch a little too much television and throw around this term “all cash” to sound impressive but then they start to do some backtracking.     The best offer to make on a property is all cash with no conditions. This means if the seller agrees with the price and closing date they can just sign the deal and it is done. The buyer cannot back out and you do not have to wait a week to see if they can arrange a mortgage, do an inspection etc. These types of offers gives the buyer a great advantage since they usually will offer a little lower than the seller is willing to take but the idea of the property being sold – this minute – is very enticing. The agents love it since it is done and nothing can come up to kill the deal and the seller can stop showing the house and move on.     Some agents use the term “all cash” but then add in a clause or two which gives them the out in case they are unable to get the mortgage. I know it is hard to believe agents may be less than truthful but they like to use the term to reap the benefits of the lesser price and appear to have the upper hand. In the past I sold a “fixer upper” which brought a ton of interest and competing offers. This one agent thought his “all cash” offer which was about seven grand lower than the competing offers would win. In most cases a true “all cash offer” would be the best offer to take in a multiple situation since the money may be less but the property is sold and you are guaranteed the number on the paper. If you took another offer that had conditions and they may come back to you asking for a rebate etc. The only problem with this agent was his “all cash” offer was bullshit. After asking a few questions and the agent asking to have the buyer’s son take a look at the property again, the red flags started to pop up.     The agent then calls and making complaints about the roof and this and that. I stopped him in mid–sentence called his bullshit and we went with a true all cash offer for the same price and sold the property to another buyer. This agent was trying to use the “all cash” offer to get our attention then he was trying to negotiate the price down further since they had this big bag of money – supposedly. Their loss, since it was a fixer upper and the second group went on to fix the property. They then sold it for a very nice profit which made them “a lot of cash”. V     Darrin DeRoches is a local real estate and mortgage broker. He can be reached to answer questions, comments or stories about real estate experiences through this weekly column at sold@uniquerealty.ca.