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Old 10-15-2014, 01:32 PM
 
440 posts, read 526,111 times
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I'm really just venting my nervousness! We are selling our house "as is" as a teardown and have to decide between a cash offer from a developer and a $14K higher 90% mortgage offer plus $9000 cash at closing from an individual. We have a copy of the pre-approval letter. We would prefer to close quickly so I know the cash offer is better for that, but the extra $23K would sure come in handy for our next home. The individual is an established businessman and our last tax appraisal is at that 90% of offer figure. We've also had three other offers at and above that 90% figure. Zilllow has us way way higher but I doubt the mortgage appraiser will count that .

We're really torn and my husband is letting me do all the legwork so it's a lot of pressure. So I wanted to share the pressure .
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Old 10-15-2014, 01:45 PM
 
Location: Englewood, FL
1,268 posts, read 2,986,634 times
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He may have a pre-approval letter, but if the house is in "tear down" condition, the bank will never finance it. Also, when the bank learns that he will be tearing it down, they will also not finance it.

Have you considered going back to the developer and telling him you have another (higher) offer on the table? Or is this offer their highest and best?

If it were me, I would take the cash offer.
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Old 10-15-2014, 01:50 PM
 
Location: AL for now
360 posts, read 1,528,910 times
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Default Can you counter the cash offer a bit higher?

Even if no, I'd take the cash offer, or the offer with fewest contingencies (read "things that could go wrong") for peace of mind. In this lending environment, you don't want to be held hostage by a bad appraisal, loan snafus, etc. When I sold a few years back, my realtor advised me that the best offer is not necessarily the highest one. Ability to close the deal/financial strength is what you want from your buyer. We actually countered one offer at a lower price than offered, but at a much higher down payment (20% vs 3% offered), and the buyer could not do it. I had other buyers who could perform and chose the all cash buyer. No regrets.
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Old 10-15-2014, 01:51 PM
 
440 posts, read 526,111 times
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Developer is at best offer; he doesn't want to get into a bidding war.
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Old 10-15-2014, 01:59 PM
 
16,715 posts, read 19,315,310 times
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Quote:
Originally Posted by CatWarmer View Post
I'm really just venting my nervousness! We are selling our house "as is" as a teardown and have to decide between a cash offer from a developer and a $14K higher 90% mortgage offer plus $9000 cash at closing from an individual. We have a copy of the pre-approval letter. We would prefer to close quickly so I know the cash offer is better for that, but the extra $23K would sure come in handy for our next home. The individual is an established businessman and our last tax appraisal is at that 90% of offer figure. We've also had three other offers at and above that 90% figure. Zilllow has us way way higher but I doubt the mortgage appraiser will count that .

We're really torn and my husband is letting me do all the legwork so it's a lot of pressure. So I wanted to share the pressure .
Take the cash and run.

Those other folks might not even get the loan, a pre-approval doesn't mean squat.
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Old 10-15-2014, 02:16 PM
 
8,073 posts, read 10,000,449 times
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We don't know what these money differences mean in the overall scheme of things.....$9000 cash as part of what? $14,000 higher relative to what?

Interest rates collapsed today. That is because there is NO demand for money. That is because the economy is VERY weak, in spite of the spew from the Federal Reserve.

If you can do a cash deal in the ballpark of your comfort zone, do it.

I sold a lot to a second developer after the original developer went bust. It wasn't pretty, but I got out, and moved on. The twenty grand bath is just a distant bad memory. Had I played games, I might still own the lot, prices would not have improved materially, and the cash buyer would be long gone.

Bird in the hand applies.
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Old 10-15-2014, 02:36 PM
 
4,567 posts, read 10,603,596 times
Reputation: 6725
Id get more info from the buyer and their financing. Who cares what they do with it after they finance it. If I had a property for years and I could get another 24k by waiting 30 days, I would do it.

Think of it this way, if you listed it next month for $24k less, would you have people knocking down your door, I bet you would. So just wait....
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Old 10-15-2014, 02:41 PM
 
440 posts, read 526,111 times
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$602K cash vs $616K mortgage plus $9000 cash. My conservative side agrees with going with the cash offer. I've followed our local teardown market for years and this year is about as strong as it's been for quite a while. I really don't think we can wait. The frustrating part is that there's another developer that offered $626 in an email but had a family emergency and is mostly out of touch. He said he would make a quick decision but haven't been able to reach him.
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Old 10-15-2014, 02:58 PM
 
Location: Mostly in my head
19,855 posts, read 65,620,752 times
Reputation: 19374
At that price point, that's not a big difference. You are looking at a tree, not at the whole forest! Take the cash and run.
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Old 10-15-2014, 03:20 PM
 
Location: Southern California
4,453 posts, read 6,768,062 times
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What do you mean plus $9,000 cash at closing, why do they need to do it that way?How about taking a non refundable deposit? I'd take the extra 23k if I was in a area non affected by winter.
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