Cash bid discount?

ittakestwo

Does a cash bid get get a discount over a mortgage bid, and if so generally by what percentage?

If the highest bidder on property was from a mortgage bid, could a cash bidder just match that bid and they would probably be preferred even tho they had not got higher and were second to bid at that price.

cd76

ittakestwo wrote: »

Does a cash bid get get a discount over a mortgage bid, and if so generally by what percentage?

If the highest bidder on property was from a mortgage bid, could a cash bidder just match that bid and they would probably be preferred even tho they had not got higher and were second to bid at that price.

No it doesn't get a discount but is usually looked on more favorably as it is seen as being capable of being closed quicker.

Zenify

ittakestwo wrote: »

Does a cash bid get get a discount over a mortgage bid, and if so generally by what percentage?

If the highest bidder on property was from a mortgage bid, could a cash bidder just match that bid and they would probably be preferred even tho they had not got higher and were second to bid at that price.

It will get you a discount in a few months when nobody else can get a mortgage from the big corona crash

handlemaster

Zenify wrote: »

It will get you a discount in a few months when nobody else can get a mortgage from the big corona crash

Good one

Edgware

cd76 wrote: »

No it doesn't get a discount but is usually looked on more favorably as it is seen as being capable of being closed quicker.

Correct. Having mortgage approval does not necessarily mean the bank will give you the money for every property you want. They may issues about its value, condition etc

BrokenArrows

The only reason you may get a discount is if the seller is in a big hurry. Otherwise most sellers wont care. You might only save a few weeks in the process by being a cash buyer.

Alternatively you can be the winning bid by matching an existing offer. The buyer is likely to choose you.

Claw Hammer

ittakestwo wrote: »

Does a cash bid get get a discount over a mortgage bid, and if so generally by what percentage?

If the highest bidder on property was from a mortgage bid, could a cash bidder just match that bid and they would probably be preferred even tho they had not got higher and were second to bid at that price.

There is no fixed percentage. Some properties have issues and want as sure and quick a sale as possible. For example a cash buyer can sign a contract which is not subject to loan approval. That may have a value from the point of view of the vendor or it may not. some properties have planning issues and some banks may be willing to lend whereas others may not. Again a cash buyer wil not be put off by this.
In other cases the person selling needs the maximum possible price for the property in order to finance a move and will not give a discount at all.

BrokenArrows

Claw Hammer wrote: »

There is no fixed percentage. Some properties have issues and want as sure and quick a sale as possible. For example a cash buyer can sign a contract which is not subject to loan approval. That may have a value from the point of view of the vendor or it may not. some properties have planning issues and some banks may be willing to lend whereas others may not. Again a cash buyer wil not be put off by this.
In other cases the person selling needs the maximum possible price for the property in order to finance a move and will not give a discount at all.

Ya, most banks require a property to be liveable for a mortgage. Running water, toilet etc.
Cash buyers have a major advantage if a property is in a very poor state and need work.

Donald Trump

Cash buyers can "buy" property that might have potential legal issues such as problems with title etc.

Am not saying that you should buy those. There is a reason why a Bank would not give you a mortgage to buy them...............