20 May Will an all cash offer save me money when buying a home?
Home buyers often ask me about writing all cash offers. Specifically they wonder if they pay cash will they pay less? The answer is: it depends.
What are the benefits of all cash offers?
What a cash offer usually gives you is the callback. In San Francisco, depending on the price point, about 30% of all offers are cash. Believe it or not, the higher the price the more cash offers.
Homes priced over $5, $6, or $7,000,000 dollars are oftentimes always purchased with cash. Below $4,000,000 it’s typically about 30% cash. And for homes priced under $2,000,000 it goes down to 15%.
If there are 10 offers and you’re the only cash offer, it’s going to get you a callback to find out if you can match or beat the top offer. As a buyer this could give you the advantage to not have to overpay the next buyer. If you’re competing against a financed offer one of the things that I’m asking the agent is, “how much higher do we need to go to win?”
In most cases in order to beat another offer, the seller wants to see a significant $30, $40 or $50,000 more than the offer below you in order not to counter all the other offers to see if someone else will come up.
Usually it’s not a $5,000 increment that’s going to win you the house. However if you’re using cash, it could be enough to win or it could be a matched offer. That’s a way that an all cash offer can save you money when buying a home in San Francisco.
If you have any other questions about cash, financing or placing an offer in general in San Francisco reach out to us. We generally get our buyers into contract in 2 offers or less.