Got cash offer before listing on market-Should I take it??

Got cash offer before listing on market-Should I take it??

Member since 2021 · 4 posts · 1 vote

Hi--would love advice! We bought a 1/1 condo that my husband completely renovated mostly on his own (my husband is a contractor w/ a background in architecture). We just bought a multifamily off market and got a pretty great deal for my area (Miami) and are planning to now rehab this property, live in it while fixing and eventually airbnb. Because we just bought a new property we are eager to sell the condo and we were in the process of talking with a realtor to put it on the market. However, yesterday through just talking with a friend who had a friend that was looking, we got got a cash offer same day for 5K over what we thought we wanted to list it for. Their realtor agreed at a 3% commission total since we would be doing it without our realtor (we haven't signed a listing contract)- and it would be great to save the other 3% (about 7-8k). They are also willing to continue paying the monthly assessment fees (which sellers usually pay at closing-about 15k).We tried negotiating asking for a 10k increase and for them to pay closing (they countered with 5k increase for a total of 220K, but that we pay closing). Now this is where I would love feedback/advice. Hubby wants to accept the offer. There are a lot of pros with it being a cash offer--particularly that we can sell fast and not have to worry about potentially paying 2 mortgages (the other mortgage starts Aug). I want to be strategic and weigh the pros and cons. My concerns are the following: 

-Could we get more? Is this a good deal? given that listings are selling for above asking on the market-I'm worried we could maybe get more on the market. However, I know with interest rates increasing that may not be the case with non cash buyers. Inventory for our neighborhood is really low though---and we are the only 1/1 that's fully rehabbed at the moment. The buyers realtor mentioned they had been looking for months and hadn't found anything. I don't want to wonder what if we put it on the market. Technically these buyers, if really interested, can also put an offer in once on the market (we had planned on listing on Monday). 

-Could doing a FSBO (for sale by owner) without a seller's agent backfire? We've never done a FSBO. But technically we found the buyer w/ out any marketing (given we go with them) so not sure how I feel paying someone 7-8k that did barely anything for this deal. The realtor is also a friend and on a personal level feel a little bad not going through with signing the listing agreement. However, she just got commission from us from the sale of the off-market multi fam deal (so don't feel too bad)

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
4y
I would take the cash in hand. There is a saying: pigs get fat, hogs get slaughtered. I don't know how a realtor figures into this at all - I assume the buyer has a realtor? Because it doesn't sound like you've signed a listing agreement yet. Unless the buyer has a signed buyer's agent agreement, I don't see how you would be on the hook there. If they do, well then that's fair to pay the commission because they've agreed to pay a commission.

Given that you want to sell, and you want to sell fast, I don't see how you lose here. Have the buyer's agent do the legwork your agent would normally handle and go from there. Or if you're uncomfortable with reviewing that stuff yourself, have them go through your agent and just wash your hands of it altogether. You're getting over what you wanted.
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  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    4y
    I would take the cash in hand. There is a saying: pigs get fat, hogs get slaughtered. I don't know how a realtor figures into this at all - I assume the buyer has a realtor? Because it doesn't sound like you've signed a listing agreement yet. Unless the buyer has a signed buyer's agent agreement, I don't see how you would be on the hook there. If they do, well then that's fair to pay the commission because they've agreed to pay a commission.

    Given that you want to sell, and you want to sell fast, I don't see how you lose here. Have the buyer's agent do the legwork your agent would normally handle and go from there. Or if you're uncomfortable with reviewing that stuff yourself, have them go through your agent and just wash your hands of it altogether. You're getting over what you wanted.
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  • Rental Property Investor · Kansas City/Chicago · Member since 2021 · 126 posts · 113 votes
    4y

    So 10k over list and not paying 15k for assessment fees? Sounds like a good deal if you property is valued at 210k. But is it? How many offers are homes getting in this area? What do the comps say?

    If your friend is the realtor they should do a CMA and show you the comps so you can make an educated decision. Alternatively, you could order an appraisal but you shouldn't need to do that. If you are questioning this, I wouldn't sell off-market until you have answers. I'm sure you are fine in this situation but you need to cover all your bases to protect your net worth. Also, congratulations!

  • Real Estate Broker · Orlando, FL · Member since 2015 · 14 posts · 9 votes
    4y

    I agree with the above reply and I am a broker who,  like your agent only gets paid when we close deals. If I was your agent i would probably still tell you to take the deal and just give me your future purchases and sales. The buyer's agent will do all the paperwork you need as she also needs to get paid only if the deal closes. If needed or you are worried pay your agent a small fee to only review the contract for you and promise  her your royalty on future deals. You mentioned you got more then you wanted, less contingencies (cash), you are saving half of the commission, and you want to close fast. Sound like a no brainer! 

  • Manny VasquezBusiness Member
    Real Estate Agent · Orange County · Member since 2022 · 317 posts · 293 votes
    4y

    I also agree with @JD Martin. I would take the cash offer ASAP and run with it. If the Miami market is anything like the SoCal market, then you may have already noticed an "obvious shift". It is no longer the Seller's market that it was 4-6 months ago. Properties that are listed on the MLS are no longer receiving the tons of offers that they used to fetch (maybe 2-4 offers now as compared to 10-12 offers before), the Days-On-Market is also increasing (drifting towards a more "normal market") and very few properties are going above the asking price (if they are going above asking its just a few thousand, not the tens of thousands above asking as before). The fact that they are offering $5K above asking is a huge win. Take the offer.

    If you decide to use the Buyer's Agent, while you may be saving some money by not hiring your agent, please keep in mind several things:

    1). Your agent may also have buyer(s) in mind that may offer more than the offer you received.

    2). Remember that this particular agent was hired by the Buyers, so even though the agent has to show impartiality in the transaction, who do you think he'll be working/negotiating just a little harder for? 

    3) Another Golden Rule of Life, you get what you pay for.  Sometimes, "saving money" ends up costing you more in the long run.  Hopefully, the Buyer's agent doesn't pull any tricks that may be to your detriment and to the favor of his buyers.

    Just my 2 cents....

  • Member since 2021 · 4 posts · 1 vote
    4y
    Quote from @JD Martin:
    I would take the cash in hand. There is a saying: pigs get fat, hogs get slaughtered. I don't know how a realtor figures into this at all - I assume the buyer has a realtor? Because it doesn't sound like you've signed a listing agreement yet. Unless the buyer has a signed buyer's agent agreement, I don't see how you would be on the hook there. If they do, well then that's fair to pay the commission because they've agreed to pay a commission.

    Given that you want to sell, and you want to sell fast, I don't see how you lose here. Have the buyer's agent do the legwork your agent would normally handle and go from there. Or if you're uncomfortable with reviewing that stuff yourself, have them go through your agent and just wash your hands of it altogether. You're getting over what you wanted.
    Thanks! The buyers do have a realtor and they have an agreement with her. We haven’t signed an agreement w/ a realtor, although verbally agreed to sign it Friday and put it on market Monday 😬. We just didn’t expect to get an offer before listing and it came unexpectedly. A nice curveball but we’re trying to make sure we don’t make any rush decisions and are strategic. 
  • Member since 2021 · 4 posts · 1 vote
    4y
    Quote from @Charles Granja:

    So 10k over list and not paying 15k for assessment fees? Sounds like a good deal if you property is valued at 210k. But is it? How many offers are homes getting in this area? What do the comps say?

    If your friend is the realtor they should do a CMA and show you the comps so you can make an educated decision. Alternatively, you could order an appraisal but you shouldn't need to do that. If you are questioning this, I wouldn't sell off-market until you have answers. I'm sure you are fine in this situation but you need to cover all your bases to protect your net worth. Also, congratulations!


    They offered 5k over asking price (asking was 215k and they offered 220k) but that asking price wasn’t quite set in stone yet. We were hoping to get more than listing when on market as is usually the case here in Miami (although it’s shifting a bit). We do know the potential buyers went to see a condo next door that’s listed at 250k and has none of the updates ours has (although it’s slightly bigger). Which makes us wonder if we would get more…and since we’re not sure about this, that’s what makes us question moving forward w/ an off market deal. It’s just so tempting that it’s a cash offer and we wouldn’t need to go through the trouble of listing, showings, etc 🙈 

  • Member since 2021 · 4 posts · 1 vote
    4y
    Quote from @Joselyne Muszynski:

    I agree with the above reply and I am a broker who,  like your agent only gets paid when we close deals. If I was your agent i would probably still tell you to take the deal and just give me your future purchases and sales. The buyer's agent will do all the paperwork you need as she also needs to get paid only if the deal closes. If needed or you are worried pay your agent a small fee to only review the contract for you and promise  her your royalty on future deals. You mentioned you got more then you wanted, less contingencies (cash), you are saving half of the commission, and you want to close fast. Sound like a no brainer! 

    Interesting! I’ve never heard of this: of promising future purchases and sales. She’s our friend but unfortunately, through working with her on our previous buy, we had decided we won’t want to work with her in the future. We decided to ask to sell the condo w her because she helped us buy it and knows that particular area well (and we don’t plan on investing in that area anymore). We realized mixing personal and business wasn’t great. She’s not horrible but she’s very new and doesn’t really understand the investment world. We were thinking of at least giving her some $$ for her time spent thus far. She did some COMPS for the condo but hadn’t done much else. 
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