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Cash Deals

Started by MTH
about 1 month ago
Posts: 361
Member since: Apr 2012
Discussion about
Will sellers come down at all for all cash deals and if so what % to ask, what % to expect?
Response by front_porch
about 1 month ago
Posts: 5231
Member since: Mar 2008

Cash isn't that unusual (in recent memory, about half the deals in Manhattan have been cash, though I haven't checked the latest Jon Miller numbers) and it doesn't provide that much risk reduction -- it protects seller against appraisal risk, but it introduces a little more board risk, because the buyer is no longer "pre-vetted" by the bank.

So what a cash offer does provide the seller is speed -- I would think it should be worth six weeks of carrying costs to the seller.

In practice, the discount you'll get will range from "zero" to "a few percent."

ali r.
{upstairs realty}

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Response by MTH
about 1 month ago
Posts: 361
Member since: Apr 2012

@Ali Thank you! Afterwards I felt kind of stupid even asking the question since there have got to be a million variables and no two situations are alike. But 6 of weeks of carrying costs sounds like a good rule of thumb. Cheers

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Response by KeithBurkhardt
about 1 month ago
Posts: 2751
Member since: Aug 2008
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Response by MTH
about 1 month ago
Posts: 361
Member since: Apr 2012

Thanks Keith that makes sense. People want to stay invested. But if mortgage rates go down so do t-bills right? It seems like a wash. Equities have been outperforming but valuations are rich at this point.

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