Re: Real Estate Q: reasonable discount for all-cash (vs. mortgage) offer??
 

I thought thats how Antonio Esfandiari buys real estate...as all HE HAS or cares about is Bejamins if I am correct?

Obv. I was just kidding around with ole' folk lor' regarding the Wild West/Bugsy Seigal analogies [img]/images/graemlins/smirk.gif[/img]

Stephen [img]/images/graemlins/cool.gif[/img]

Re: Real Estate Q: reasonable discount for all-cash (vs. mortgage) offer??
 

A main component missing from any analysis is the fact that this is a co-op. Any sale wthin a co-op needs board approval. Most co-op boards require at least 20% down because if a buyer were to default on the mortgage, the co-op would be forced to ‘carry’ the condo/loan (they can’t very well have a bank ‘owning’ one of their condos). A risk/cost they rather not bear.

Consequently, a major headache for any seller is getting a potential buyer past a co-op board. If you pay all in cash, you are almost guaranteed board approval (unless you are a minority…co-ops, while legal, are still highly discriminatory). Your cash offer would definitely be worth some discount to the seller, especially if he is already having trouble selling the place. Lack of demand often means greater ‘reach’ buyers presenting highly levered offers. You should ask the realtor if any other potential buyer went before the board…

Re: Real Estate Q: reasonable discount for all-cash (vs. mortgage) offer??
 

As a Manhattan coop deal, the key thing you can offer him is high likelihood of board approval. That will help only if (A) you actually are highly likely to get board approval and (B) his board actually rejects a reasonable number of buyers.

The board will favor a cash deal, but will be more concerned about your own balance sheet and income statement. Your race, religion, etc. is unlikely to matter one iota unless this is one of a small handful of buildings (and from the price, i am certain that it is not.)

Quick closing is impossible, you can't close until your application is approved by the board and they set the schedule.

My guess is that if conditions (A) and (B) are met, you may trade at a favorable price, but any "discount" will be tiny.