Lost Another One To 'All Cash'
I recently lost another deal to an 'All Cash' buyer. it went like this...
1) Locate property
2) Make full price offer
3) Put the 'Good Faith' money down
4) Sign Contract
5) 'Cash' buyer walks in behind me and takes the deal!!!
My financing is in place (pre-approved w/commitment letter)...
I blinked and it was gone... what the...?
Can someone explain in english how this works?
Thanks
MDH
I am a real estate broker as well as an investor. As a broker, if I was selling someone's house and I was presenting 2 offers to a home owner at the same time and both offers were identical, one being "all cash" and one being financed, the "all cash" offer is a cleaner offer. It will close quicker . With a financed deal there is always a possibility something will go wrong. Financed deals are infamous for the lender wanting something fixed or altered that will cost the seller $ before closing. That is why "all cash" deals are cleaner deals. Now if you had a valid signed contract with the seller I'd be contacting my attorney as I'd be looking to take some legal action. The seller should probably at least be offering to "buy you out" of the contract. Or the new buyer can do the same. I hope you have a good attorney to work with who is well versed in creative real estate. Their advice can be invaluable when structuring creative deals. Good luck!
I make all of my offers cash offers.
Was this a listed property? If so, Did you make the offer through a buyers agent or straight to the listing broker?
In plain english, sometimes shady things happen. The stories I could tell.
Thanks for your quick replies...
upstatenylandlady; perhaps you're correct I probably should look into legal action. I did consider it, but that's time and capital I really don't wish to spend now.
lacashman; you said you make all your offers 'all cash' Does that mean you literally write a check for the full asking price on each and every deal? If you're that position... God Bless You!
Mykle; My offer was through my buyers agent to the listing agent.
This whole scenario took place in a 2 hour time slot.
I guess my frustration is this... even a cash buyer has the due diligence time frame to contend with right? or have I overlooked a crucial step in the process?
MD:
There are some things you can do to prevent this.
#1- Try to build a good repore with your seller. You really need to befriend them. Take them to lunch!
#2- You might be able to get away with filing an "Memorandum of Purchase Agreement" on the property. You could start telling your sellers after they sign the contract that you are filing one to protect you.
#3-If they have escrow companies where you live, I would also suggest opening an escrow also!
#4- One thing also is I would recommend writing your offer up like a 'all cash' offer also. Technically it is because your lender is going to be wiring cash over to fund the deal!
Best Riches,
Jeff Adam
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The listing broker had a buyer lined up, he was waiting as long as he could to put pressure on the seller hoping for a lower price. As soon as your offer came in he called his buyer. The buyer had done his due diligence already, he probably was in the place before it was officially listed.
Thanks Again everyone...
Jeff; what's the advantage to opening an escrow account in advance of the offer?
(pardon my 'newbieness')
My offers do not contain any weasle clauses.
It does not mean that I have the cash in the bank but it means that I will close on the property.
But before you write one of these make sure that you can close. You cant say that the lender will not give me a loan because the bathrooom does not work.
But I can close.
MDHolderfield,
I am an investor in California and frequently come across this type of deal (and it sucks when I lost them). What I do now, if I have the resources at hand, is offer 30% down with my pre-approved/commitment letter and meet with the owner when you present your offer. This will build rapport with the owner and you will have very good chance of winning the deal over an "all cash offer". Remember the deal is not done until the “all cash offer” gets the deed signed over to them. 8-)
DOC:
An escrow company is basically the same as a closing attorney. They hold the money and process the paperwork....
The reason I like working with an escrow compan y is my funds are secure, they process all the paperwork correctly and I can assign my escrows if needed....
Best Riches,
Jeff Adam
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