How do you Compete with a Cash Buyer?

It assumes they can settle quickly. "Within the hour" was a bit exaggerated but surely you believe it's possible to settle faster than the average 21 day finance period?

 

In Qld at least vast majority of offers are conditional on finance and a good portion of them fail when finance is declined. So yes a cash offer has a big advantage.

 

No just short settlement time. Say 3 weeks instead of 6 weeks or whatever the norm for your area is.

 

I think there's been confusion here on terms.

"Cash offer" = "unconditional offer".

It doesn't mean you pay in straight cash Without borrowing.

 

If you don't feel comfortable, best to walk away from such transaction.

Or

As others said, have good broker/banker on board.

Other way to tackle this is

Have credit assessed pre approval.
Sign contract wirh 5-7days Cooling off period and try and get unconditional approval from bank within that period.

 

I have heard of several property purchases that were literally cash (no finance involved) including one where the winner at the auction didn't have a cheque and just presented them with bank details for his term deposit account and said "just take it all from here."

 

Yes I'm sure there has been. My point is that when people say cash offer for properties, it doesn't mean you have to pay in cash only. It's just that the offer is unconditional.

 

My limited experience in NSW suggests that the majority of vendors request a 66W anyway so an unconditional offer (but still requiring finance) is the norm. Hence when I see "cash offer" I interpret it in the literal sense.

Interested to hear from NSW brokers what % of contracts are unconditional though...

 

Unconditional but still requiring finance would mean that it's not unconditional.

 

I thought if you exchange contracts with a 66W then you waive the cooling off period? And you will be up for 10% penalty if you fail to settle for any reason, including arranging finance (plus more if the vendor sells for less later and decides to sue you for the difference)?

That's what I meant by "unconditional"

 

Yeah I know where you're coming from. However, the common understanding is that you've just waived the cooling off period. An unconditional offer is one without conditions (go figure), and cash offer is also another way to say unconditional offer.

If you have a finance clause then even if you waive the cooling off period you can still pull out for finance reason. In that instance you won't be up for anything.

 

Ahh ok, didn't know you could go 66W but still subject to finance. All of my purchases have been 66W + not subject to finance/b&p/anything, assumed they went hand-in-hand and no one explained otherwise

 

If the owner held the title, the buyer has cash, they can exchange and settle as fast as the paperwork can be done.

 

'Unconditional' was mentioned in another thread, in the context of still using the particular state mandatory cooling off period to do DD, not like auction conditions.

 

Still doesn't add up to me. We are talking say 380k without the discount, surely concern for finance falling through at that amount is very slim, very lease to the tune of 50k.

I know people get desperate fair enough but we are talking about throwing away 50k for the sake of what maybe settling 10 days earlier because no banks are involved (well maybe still to discharge the mortgage) and a very very small chance the buyers finance falls through?

Personally to me the discount would lie more in the property. I would be doing a heck of a lot of due diligence.