We all have heard the phrase “Cash Is King”. Is it or is that a myth? Does the phrase apply in the real estate world especially in today’s market?
Cash is KING! It does apply to real estate and in today’s market. But Cash isn’t always KING either and it may not apply to the real estate market. Huh? Puzzled yet?
Usually, if you are buying something at store, you might pop the question, ïf I pay with cash, can I get a discount?”. I use that all the time and everywhere I go. There is no harm in asking and who knows, you might just get lucky.
When you are buying or selling, the CASH aspect does play a role. If you are a seller, if you get an offer that the buyer is paying cash, here is what you should know:
- the buyer is ready to buy
- the buyer does not need a financing company, one less party in the transaction
- the buyer can close quick.
Now, you as the seller, should ask for the proof of funds. If they can provide the proof, then they are legit and serious. If they have to pull together the cash from several instruments, then you know, they might need some time to pull all the cash together. Make sure you ask for the appropriate time frame to close so that they can get the funds together.
Now, if you are a buyer, you should know that:
- You may not get a better deal just because you have cash. The seller already have a set price. Occasionally, you might get lucky but most of the time, they might pick your offer because you have one less party to deal with.
- You may still have to negotiate the other deal like the closing time frame, or the repair negotiation. Again, the cash here is not going to make you more superior.
- You will have the advantage over someone who needs a loan if you are in a multiple offer situation.
So, just cause you are paying cash doesn’t mean you are more superior than the other party involved.