Sellers can simply choose the highest offer even if it has a loan contingency.
I never got the whole “cash offer is king I’ll take that over the higher financed offer” thing.
If I get an offer that includes a bank statement showing the ability to easily put 25% down and a preapproval letter for the whole amount, I will take that over a cash offer 1% lower.
Maybe “cash offer” is being used as a short-hand for “very firm no-BS offer” and the buyers who complain about losing out to lower cash offers have shaky finances and picky contingencies.
I also have some solidarity with people who don’t have huge piles of cash, as long as they show me strong evidence they can get financing.[/quote]
In certain times, there was value for someone that can close quicker than someone who has a loan contigency. For example, if someone is selling to buy another place, the seller sometimes would rather choose a more “sure” thing IE someone like me who could remove all contingencies within 10-15 days, versus say 17-19 days + still have a loan/appraisal contingency because maybe part their funds used for selling their current place is needed for the new home because the longer someone takes to close, the greater the chances are for people to back out or get cold feet and then restart the process and find another buyer.
But these days, when there’s like a 20:1 or 30:1 buyer to house ratio, quick closing is much less important because chances are if the first buyer can’t perform, there’s probably 19-29+ other buyers that will gladly take their place. And who knows you might even be able to get even more money for it….
So sellers are more inclined (probably) to go with the highest offer, even if there’s a possibility that the buyer can’t perform.
And there’s no way I probably will beat these people getting a loan to try to buy their primary home..Because for me, there’s a point which I think this doesn’t make financial sense and can’t push myself further to buy. But for others who are buying this home as their primary, some aren’t thinking purely financially but looking at it as something they plan on living for a long time, and so it’s probably ok to spend more for home ownership. Me, I’m not as attached to that specific property, and just want any property that makes slightly sense. So in this market, I’ll probably lose close to 99% of the time…But that’s ok, because I just need that 1% win every so often so i can park my money somewhere in between a 0.1% CD and a overheated stock market….And i like rental properties when the target audience is for your seasoned professional, like a qualcomm engineer just starting out or someone similar who is more than well qualified to rent… The search continues…
