Is Cash King?

Does paying for a house in cash in a seller's market tend to get accepted by a buyer when it is not the highest offer? How much room does a cash buyer have to give a lower offer?

That is a myth, at least in the Bay Area. And here’s why…

Whether a Buyer is paying in cash or obtaining a loan, as long as the Buyer does not have a loan and appraisal contingency and is pre approved for a loan then there is no reason that a Seller would take a lower all cash offer.

I realize that is not the case in all areas, but in the Bay Area where No Loan and No Appraisal Contingencies are the norm, it doesn’t make sense for a Seller to take the cash offer unless it is the highest offer.

However, in LA things are a bit different. In Beverly Hills, West Hollywood and the surrounding areas, most offers are presented on behalf of a Buyer with 1. Loan, 2. Appraisal, and 3. Inspection contingencies. Very different than what is customary in the East Bay, Oakland, Berkeley and Piedmont.

I wrote an offer in West Hollywood in a multiple offer situation with a pre approval letter but but the Seller took the lower all cash offer. It didn’t make much sense to my Buyer or myself who works the Bay Area, but for the Seller, he felt he just wanted to fast close and to be done with it. His condo sat on the market during COVID 2020 thus when he came back on in 2021, he just wanted to close the deal and walk away.

Wherever you are buying a home be sure to speak with a local, qualified, knowledgeable and experienced Realtor.