Reply
Regular Contributor
Totally_Diot
Posts: 87
Registered: ‎03-28-2012
0

Re: 52 offers on a dumpy duplex in echo park?

Did that thing with 63 offers even sell?! Apparently not...or wtf happened?!

 

http://www.redfin.com/CA/Los-Angeles/1306-Waterloo-St-90026/home/7058499

Contributor
SomethingElse
Posts: 17
Registered: ‎10-30-2009
0

Re: 52 offers on a dumpy duplex in echo park?

Of course it sold... the bank took the highest all-cash offer. I'll be watching to see for how much. 

 

Can ANYONE explain in detail why a bank would choose to sacrifice $50K (or possibly much more,) just to have the cash in hand a few weeks sooner versus selling to someone who's got a solid offer with conventional financing? 

 

It seems like "all cash is better" is taken for granted here, but I don't understand how a bank can look at the numbers and makes that $$ sacrifice.

Silver Super Contributor
Bruin99
Posts: 1,331
Registered: ‎06-25-2009

Re: 52 offers on a dumpy duplex in echo park?


SomedayBuyer wrote:

Of course it sold... the bank took the highest all-cash offer. I'll be watching to see for how much. 

 

Can ANYONE explain in detail why a bank would choose to sacrifice $50K (or possibly much more,) just to have the cash in hand a few weeks sooner versus selling to someone who's got a solid offer with conventional financing? 

 

It seems like "all cash is better" is taken for granted here, but I don't understand how a bank can look at the numbers and makes that $$ sacrifice.


1a.  All cash means less work for the bank.  The more contingencies that exist, the more work the bank has to do to release those contingencies.

1b.  Along those same lines, the more contingencies that exist, the more likelihood that the home fails one of those contingencies and has to be put back on the market.

2.  The prevailing thought/course of action a few years back was as a buyer, just put in the highest bid (with no intention of paying), get your offer accepted, then find reasons to negotiate a lower price (appraisal, inspection, etc).  I'm sure this is coming back to bite buyers as a whole as banks figured out the game and don't want to deal with it anymore.

3.  An all cash buyer is more serious than a non-all cash buyer.  The all cash buyer is usually a person whose in the real estate business (flipper or investor) who isn't going to change their mind because they aren't sure if the color of the granite countertops matches well with the paint in the living room. 

4.  The frame of mind of the cash buyer is different than the non-cash buyer.  For example, if a foundation issue is found, and the cost to fix it is $20k - the flipper/investor knows it's just a $20k problem that needs to be fixed.  The non-cash buyer gets scared of buying a home with foundation issues.  Furthermore, the non-cash buyer may not have the cash to be able to fix the issue, and banks don't want to put more money into fixing their homes.

 

Contributor
SomethingElse
Posts: 17
Registered: ‎10-30-2009
0

Re: 52 offers on a dumpy duplex in echo park?

@Bruin99-- you make a lot of excellent points. Thanks for the insight!

 

For the record, there aren't crackheads or homeless people anywhere on that hill.  It's mostly a quiet, 1/3 yuppy 2/3 working class neighborhood, in high demand rental wise. The place is going to be back on the market in 4-5 months for $700K and it's going to break my heart a little bit. But I'll be darned, I probably WOULD walk away from foundation issues, not having the cash to fix them either.  Sigh.

Contributor
AdmiralAdama
Posts: 20
Registered: ‎04-12-2012
0

Re: 52 offers on a dumpy duplex in echo park?

Contributor
SomethingElse
Posts: 17
Registered: ‎10-30-2009
0

Re: 52 offers on a dumpy duplex in echo park?

New paranoid theory: it's all a fishing expedition by the loan officer trying to get potential clients?  They listed it as active for a whole day then took it off again. Despite having accepted an all cash offer.

Regular Contributor
Totally_Diot
Posts: 87
Registered: ‎03-28-2012
0

Re: 52 offers on a dumpy duplex in echo park?

yes...or a simple screw up?!