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Comment by gsharma | Hacker News Reader

The deal isn’t always about the price. For example, a $1M house bought with $100K down and $900K mortgage is a worse deal for the seller as compared to $500K down and $500K financed. Assumption here is that it is more likely to get a $500K loan irrespective of the appraised value of the house.

A lower all cash offer (say $975K) is likely a better offer for the seller because it reduces the risk for them and closes the transaction much quicker than a mortgage transaction.

I have been a buyer in two transactions where my offer was slightly lower than the highest bidder, but with better terms.

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As a home buyer, I've been beaten many times by an all-cash offer that was significantly lower than my financed offer. For example, a $450K all-cash offer where they'd close in 7 days beat my $525K 80/20 offer where it would have taken me 25+ days to close.

This makes sense for the seller depending on how often a financed offer falls through. Our agent mentioned that in Amsterdam for example over 1/3rd of the offers with a financing condition fall through. And they do so weeks after the signing of the agreement so it costs the seller significant time and money.

With such a high chance of not actually getting the sale done, sellers are motivated to take 475 immediate cash instead of 525 with a 1/3rd risk of having to do it all over. Especially if they need the cash to buy their next home.

> I've been beaten many times by an all-cash offer that was significantly lower than my financed offer

Note that all cash commonly means no financing contingency. I put in an all-cash offer and financed it. I just didn’t have an out if I couldn’t find financing I liked. (Legally.)

> a $1M house bought with $100K down and $900K mortgage is a worse deal for the seller as compared to $500K down and $500K financed.

Do sellers in the US know how large your down payment is? AFAIK that's not a thing in Canada. Offers either have a financing condition, or don't. If the offer doesn't have a financing condition, the buyer might be paying cash. But they could just be trying to present an offer with better terms, gambling that they'll definitely find financing somewhere or the other.

Yup, the seller is (at least should be) made aware of the financing structure, as it’s part of the offer.

Every time I’ve sold a house it’s been a factor in deciding which offer(s) to pick or counter.

That's interesting. My last house was $$$ and I had no RE agent. Negotiated with the seller's agent myself. Never once disclosed financing info.

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