Is Cash "Always KING" When Buying Real Estate?

Is Cash "Always KING" When Buying Real Estate?

A few weeks ago I listed a house for sale in Kenosha, Wisconsin.

On Day 1 we had a huge onslaught of showings.  My cell phone was dinging throughout the day alerting me of the fact that another agent had been confirmed through our FlexMLS ShowingTime system. Agents were texting, calling and emailing me throughout the day asking questions about best terms, etc. and advised their buyer was considering putting in an offer but wanted a quick answer/response from the seller today, if that was even possible.

My seller was on the road and unable to have offers presented until later that evening and so we set a time to review all offers for 8 pm that night. 

Lucky for me I was able to walk 3 different buyers through the house.

     * One was an investor client (conventional buyer) who has bought a few homes with me in the past 2 years 

     * One was a Cash Buyer - also an investor client who I've worked with numerous times over the past 30 years

     * One was another agent's client (conventional buyer).  Mid-afternoon a REALTOR called my office to advise me about his very interested buyer who was in a panic, afraid she might lose out on an opportunity to see this house and possibly offer on it today. She told him she knew it would not last more than a day!  Unfortunately, the agent was unable to show her the house because his wife was literally in labor and about to deliver their first child. I told him I would be happy to show the house to his buyer.  And I did. 

Offers had started coming in!  One right after the other.  In fact, of the 3 prospective buyers I showed the house to, all three decided they liked the house and wanted to put in an offer! 

I confidentially discussed offer details and terms with each of my individual buyers ... and since I was now in a position of writing with more than one buyer that day I advised each one to make their offer "their" highest and best that they were comfortable (able and willing) to give.  I disclosed to all 3 buyers that numerous offers were already received with more on the way, and that submission of all offers to the seller would be made later that night. 

Each buyer submitted their best bid and terms for me to put in writing for them and to sign electronically later in the afternoon.

I did my best to explain to my Cash buyer about the numerous offers coming in and after he thought about all the information I shared he then said ... "yeah, well cash is king!"  Then asked me to go ahead and write up his non-contingent offer with a quick close and hefty earnest money deposit. Unfortunate for him, all (and I mean literally ALL) the other buyers saw and recognized the location, condition and price of the house was very fair, competitive, and within their reach, and thus brought forth their best offers to the table (some with and some without contingencies). The offers were all above asking price.  Except one! Yeah, you probably already know who it was. And guess what?  Cash was NOT KING!

After presenting each offer in the order they were received, my Seller made his decision on which offer would be his Best Choice.  By the way, he did not accept the highest offer but instead made his decision based upon what were the best terms for him, the seller -- fair price, acceptable earnest money deposit, convenient closing date, very few contingencies, the type of loan, interest rate,  lending institution/loan officer, downpayment ... and that Meeting of the Minds! 

Bottom Line: The Seller's Net Proceeds at Closing.

It's been said, Cash is King ... Until it's not!  

Thinking of Buying or Selling?  Let's Chat!  This house was listed and SOLD within 24 hours!  I would love to help you with all your Real Estate Needs!