Buying a house with cash vs financing

Casablanca

Junior Member
Forum Supporter
#1
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
 

Casablanca

Junior Member
Forum Supporter
#4
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
#6
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

Junior Member
Forum Supporter
#7
? 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

Junior Member
Forum Supporter
#9
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!
 
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