Detroit Real Estate

Here is why the bank took a lower cash offer over your offer on the West Bloomfield home. 

Cash deals are usually king.  The banks will usually take the cash offer over a mortgage offer. 

Banks prefer cash deals for these reasons:

• cash deals can close within a month.  They close quicker than mortgage deals that take 30 to 60 days..
• cash deals don't require an appraisal.  There is no chance that the deal will fall apart because the house didn't appraise.
• cash deals don't have a mortgage.  The deal can't fall thru because of mortgage problems such as debt ratios, and underwriting issues.
• cash deals don't depend on the buyer having a job.  If the buyer loses their job on a mortgage deal the deal is dead.  With cash deals it can still close.
• cash deals have already proved they have the money.  When you put in a cash offer you must get a proof of funds letter.  The letter comes from your bank and states that you have a certain amount of money in your account. 
• cash deals will be accepted when there are repairs that will need to be completed for a FHA loan, VA loan, or a conventional loan.  
• cash deals don't have an out. If you don't close with a cash deal you lose your money.  If you have a mortgage you can get your deposit back if the house doesn't appraise or if the mortgage doesn't go through.

Many times banks will take a lower cash offer over a mortgage offer.  It just depends how big of a difference there is.  I lost a deal on a piece of Livonia real estate on a cash offer.  The list price on the Livonia ranch was $61,000.  My clients bid $81,000.  The bank accepted an offer of $55,000.

That was a $26,000 difference.

I hope this explains why the bank took a lower cash offer on the West Bloomfield real estate you loved.  So if you can afford it,  bid cash. 

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