Orange County

[financeguy]

 So I’m looking for properties in the 350-400K range.   Often times, even though my and other standard (20% down) offers are higher than cash offers, the cash offer almost always wins with REOs.   So if the REO is priced well (ie multiply offers), you almost have no chance of winning, even if the offer was like 5-10K higher.

Does anyone know from experience how much higher a standard offer might need to be in order to win against an all-cash offer in a REO situation (+3%, +5%, +10%).   I know that this is a difficult question to answer, which varies case by case, but I was wondering if someone successfully placed a standard offer when they were competing against an all-cash offer on an REO.

Thanks.

[JK_1]

I beat out a higher offer when I bought my home though neither of them were all cash offers. One of the other offesr was higher than mine but I came in with a higher good faith deposit and increased my down payment. I think that made a difference (it was an REO too)

On another investment property we were those all cash buyers. I think you might beat out an all cash buyer but you really need to prove that you are capable of closing. We were able to close in about two weeks. With banks making it difficult to close you either have to come in with a higher down, etc.. like I said above or the bank is likely to choose the sure thing as far as someone closing.

Just my .02

[JK_1]

Also I might add that if you have many (any?) contingencies the banks may not want to deal. Most of them are selling it as-is. While I would still recommend an inspection if in your offer you are asking for several contingencies they might ignore you.

Another little trick I hate is the banks come back to all the offers and ask you to submit "your best and final". To that I usually say please have the bank put it in writing as a counter offer. That way you can get them to deal just with you. They will then counter whatever offer you make anyway. Often I've said that is my best and final...make a counter and we'll see.

Just my .02

[WhatARipOff]

I can't provide an answer as to how much MORE you would have to pay in order to compete effectively against any particular all-cash offer, BUT I can provide an answer as to the WISDOM of doing so, and that answer is; DON'T!

As a buyer, time is ON YOUR SIDE! Except for the exceptionally few instances in which someone forcibly HAS to buy (quite honestly, I can't seem to come-up with a single reason right now as to WHY someone would HAVE to buy) , most times buying is a CHOICE ..whereas selling is a NEED. The vast majority of all-cash offers come from institutional investors and you really CAN'T hope to compete against their fathomlessly DEEP POCKETS. Soon the all-cash offerers will be gone from the marketplace as the margin to turn a profit on FLIPS & RENTALS gradually disappears.

[john72]

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WhatARipOff wrote:

I can't provide an answer as to how much MORE you would have to pay in order to compete effectively against any particular all-cash offer, BUT I can provide an answer as to the WISDOM of doing so, and that answer is; DON'T!

As a buyer, time is ON YOUR SIDE! Except for the exceptionally few instances in which someone forcibly HAS to buy (quite honestly, I can't seem to come-up with a single reason right now as to WHY someone would HAVE to buy) , most times buying is a CHOICE ..whereas selling is a NEED. The vast majority of all-cash offers come from institutional investors and you really CAN'T hope to compete against their fathomlessly DEEP POCKETS. Soon the all-cash offerers will be gone from the marketplace as the margin to turn a profit on FLIPS & RENTALS gradually disappears.

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People mostly DON'T need to buy. They say they do, but if you break it down, its a choice. IE, you don't HAVE to buy just cause a baby is on the way or whatever.

False sense of urgency is a common sales tactic used in the worst situations for buyers including car sales and timeshares. Why anyone would allow this tactic to dictate their home purchase is beyond me. People are already familiar with its horrible past(buy now or be priced out forever), and I can't understand how the sheeple still fall for it after going through that.