[jvp]

I'm in Colorado and just bought a home over the last month. I went with a service called Accept Inc. You basically go through the underwriting process first, they then buy the home you want in cash (Giving you a cash offer to the seller), then you do a traditional mortgage to buy the house from them. No mark up.

Sounds great... but I can tell you that having a cash offer didn't mean anything if you weren't the top offer. I lost out on many homes because I didn't come out on top. Lost against those with conventional loans too. People will wait an extra 2/3 weeks if it means an extra $10K in the home price.

[poulsbohemian]

Real estate agent checking in here... so yeah, cash is generally king, but a good agent can often recommend ways to make your offer stand out. Negotiating skills is one of the areas where an agent can shine and really earn their commission.

Regarding the comments on appraisals below... so I work across a state line. In one market, the majority of appraisals don't have a problem unless the accepted price is really something ridiculous (and I'd argue the listing agent should have done a better job coaching their sellers to avoid that situation). In the other state though, we have a serious problem with appraisals. There aren't enough appraisers in the area, so they are coming from 2+ hours away and really don't know our market. This is compounded by many of them not being able to pull comparables from just across the state line. It's seriously messing with our market, for both buyers and sellers. Looking for a career post-technology? Become an appraiser or an inspector, we don't have enough of either.

[twelve40]

how can an agent shine when the offer is not in the top or competing with cash? send a basket of roses to the sellers?

[poulsbohemian]

There are lots of things we can do to eliminate contingencies, things with earnest money, various ways we can accommodate the needs of the seller, etc. Does seller want to close early or do they need a delay? Do they need a little extra cash up front to assist with their move? Every state will vary, but there are a lot of built-in contingencies that many buyers will be glad to scratch and an informed seller will understand removes barriers to a successful sale. Sellers want to know their transaction is going to close on time, with minimal drama. There are lots of ways a good agent can advocate for their client and embody that contractually. Every market is different - the tactics I use are different than those of my peers in other markets.

[sjg007]

It sounds weird because the house has to appraise at the correct value to get a mortgage. Otherwise you have to make up the difference in cash..

[sokoloff]

Appraisals are somewhat grimy IMO. When our house was being appraised, the appraiser asked for the P&S price as part of his research. To no one’s shock, the appraisal came in just over the P&S price.

(To some extent, I get it. I’m an arms-length buyer. I’m willing to pay $X. That’s strong evidence that that’s the arms-length market price.)

[garciasn]

We offered significantly over asking and offered to cover the difference between appraisal and our offer, if it didn’t appraise for our offer, in cash. Ours did not appraise for our offer and we had to cover around $14K in cash.

—-

As for the Zillow topic:

Zillow is fantastic for sellers. I was offered well above market for my house, paid at least 5% less in fees, I could do everything remotely, and I could close in 14 days.

Fuck traditional realtors. Our buying experience sucked. Zillow made selling a breeze and I would recommend it to anyone looking to sell right now.

[brutus1213]

I asked my banker about this issue (as I had the same concern), and she shrugged and said usually it usually isn't a problem. What you bid is what we usually consider market value. This is the Greater Toronto Area in Canada (bangs head on wall).

[toomuchtodo]

Unless your offer is wildly above comparables, it’ll appraise at or above your offer price, assuming an arms length transaction.

Cash offers distort the market because they drag up prices beyond what income driven mortgage offers would.

[KirillPanov]

This assumes that it's better for bankers to decide how customers spend their income than for the customers to decide that.

Also, "income driven mortgage" is really "salary from large employer driven mortgage". For everybody else it either underestimates, breaks down badly, or both. Especially business owners. "I sign my own payroll check" is not what a banker wants to hear.