With the current Michigan home values some Oakland and Wayne County home buyers are paying cash. I had a investor that put cash offers on two metro Detroit foreclosures today. Banks like it when home buyers and investors pay cash. The reason they like to see a cash offer is because there is no way it is going to fall apart because of the mortgage. The banks want a sure thing and a cash deal is a sure thing.
The home buyers won’t back out or can’t back because:
- the bank wouldn’t approve their mortgage
- the house wouldn’t appraise and the bank wouldn’t approve the mortgage
- they lost their job and the bank wouldn’t give them a loan now
But you can rest assured that you still can have an inspection clause and be protected with a cash deal. There are safeguards for good title and inspections for cash deals in our purchase agreements.
The home buyer or investor would lose their earnest money deposit if they back out on a cash deal. That is the reason sellers believe cash is king. Sometimes banks that have Metro Detroit foreclosures will accept a cash offer over a mortgage offer.
If everything the offer price is similar on two offers and one is cash the cash deal is going to win. Sometimes the bank will even accept a little lower offer if the lower offer is cash. But don’t believe that just because your offer is cash that you will win. If you are low balling the list price and somebody puts in a $10,000 better offer you may not win. $10,000 is $10,000.
Another reason a cash offer is accepted is that a cash deal closes quicker. So the bank doesn’t have to pay overhead on the house as long. They can shorten up the time on utility bills and property taxes. There is no if.
So if you have cash and you really want the house put in a cash offer. You’ll have a better chance of winning that Metro Detroit foreclosure.
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