Buying a house with cash vs financing

Casablanca

Member
Can you please confirm that a buyer who uses cash can reasonably make an offer that’s 20%-25% lower than the asking price? I believe that I read this on this site a while back.

How about financing? How much can a buyer low ball that asking price?

I am sure that your answers will remind me of the recommended answer I used when asked by a client about something complex during my time with IBM: it depends :rolleyes:

Thank you
 

Queen of Kings

Well Known Member
Silly question. You can offer whatever price YOU want. Whether it is accepted or not can depend on dozens of variables. Cash is simply one of those.
 

Casablanca

Member
Actually I am asking about the delta in the offer: cash vs financing. Do we expect the seller to accept a lower offer if the buyer has cash on hand?
 

Roberto

Well Known Member
Most offers and transactions in home sales in Penasco are and have been in cash, so a cash offer is not usually exciting to the seller. . Banks in Mexico generally are reluctant to loan money for any purpose. There is apparently no legal mechanism which permits a bank to 'hold' a title until the loan is paid off. There was a sort of conditional Bank Trust offered for awhile but none of the banks wanted to do it. There has not been traditional bank financing as in the states. Some say this is due to the requirement of a Bank Trust. If you find financing is usually offered privately by the seller and often includes a very large initial payment (50%) and higher sales price plus a generally higher rate (than the US). The seller is doing you a favor in a way so they usually hold the price as well. You do not get a Trust in your name till the loan is paid off.

You will find condos offered by the developer on terms and they may drop a price for a cash offer.

Those without cash , historically, refinanced property in the US and used the cash to purchase a home here. Many of these folks were approaching retirement and had built up massive equity in a home they bought 25 years ago. By refinancing they bought their retirement home in Mexico , lived in their home in the US and worked for a few more years until retirement, then sold the US home and paid off the refi loan.

And looking for sales figures is virtually impossible. Any good realtor here will tell you whatever you want to hear about the value of a property to effectuate a sale !!! You will get a rough idea of competitive value by being here on the ground and paying attention to asking prices, time on the market and sales figures you hear about.
Happy Hunting !!
 

Casablanca

Member
? I am at a loss for words, if you were next to me, I would have offered you a beer. Thank you! I am going to read everything a few times to make sure I didn't miss anything.
 

Casablanca

Member
Very interesting. Just like in the US in the "good old days". It's not a bad idea as long as the interest is not too crazy. Thank you Terry!
 
Can you please confirm that a buyer who uses cash can reasonably make an offer that’s 20%-25% lower than the asking price? I believe that I read this on this site a while back.

How about financing? How much can a buyer low ball that asking price?

I am sure that your answers will remind me of the recommended answer I used when asked by a client about something complex during my time with IBM: it depends :rolleyes:

Thank you
Can you please confirm that a buyer who uses cash can reasonably make an offer that’s 20%-25% lower than the asking price? I believe that I read this on this site a while back.

How about financing? How much can a buyer low ball that asking price?

I am sure that your answers will remind me of the recommended answer I used when asked by a client about something complex during my time with IBM: it depends :rolleyes:

Thank you
That is not absolutely true there is not such a range % of discount prices for cash. Each owner will decide what offer to accept. You can present offers and see what the owners will respond. Cash transaction are easier here as we do not really have financing. Most financing are owners financing, and i have seen prices go up for financing deals not discount on the purchase for financing. Feel free to contact me to discuss further.
 

richwi

Active Member
Having lived in a number of countries I find the US real estate market unique. The idea of comps, market surveys etc are not all that common for residential properties outside the US and in Canada to some degree. When we bought our house here we decided what we could afford, we found a house that we would be willing to pay that much for and we made an offer (cash). The buyer accepted and the rest is history. Comps etc ever entered our thinking. Being honest the idea of insulting the seller with a particular offer wasn’t part of our thinking either. We made an offer and they were able to decide to accept or not, simple as that. As a side note, we were told someone else made an offer that asked the seller to carry a loan for while and the seller rejected it, no harm, no foul.
 

Casablanca

Member
To make a long story short, we did make an offer; it was our real estate agent who advised us to come up with a reasonable number. The seller barely budged, he basically sent a message: “I am not even going to attempt to meet you in the middle”.

That experience made us go to India, find a guru who can teach us the meaning of life, etc.

All joking aside, we decided to just wait; we know that what goes up must come down (we also know that the price of that house had appreciated by around 100% in 5 years).
 
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