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Alright, well no reason I can't lay all my cards on the table here with specifics about the place I'm considering, which might elicit some more informed replies.

- It's a very large 1BD co-op in Manhattan (sure i'd rather have a condo, but NYC is 85% co-ops). GREAT space, although I'd prob want to put in 25K worth of work to really make it "mine". It would be my primary residence.

- Was on the market at 700K for a few months and got very little interest. Seller dropped asking price to 600K, and has had some interest, but seller hasn't accepted anything yet (even though the seller's broker conceded that seller was "motivated.") I know for a fact that seller has had offers (20% down / 80% mortgage) in the 550K - 565K range, but has not accepted any of them.

I'm wondering just how much of a discount might be reasonable to expect given that I'm in a position to offer all-cash. I am aware, by the way, that the seller essentially gets the entire purchase price on the day of the closing anyway **EDIT: as I see Zee also pointed out while I was typing up this reply** (e.g. it doesn't matter whether it's 100% all-cash from the buyer, or 80% financed, because the mortgaging bank will pay that entire 80% to the seller on the day of the closing). But as Soss said, the main advantages to an all-cash offer are:
i) it's a more streamlined closing process,
ii) seller doesn't have to worry about financing-approval (although to be honest, I don't really see what's so great about this, b/c seller requires that prospective buyers be pre-approved for a mortgage anyway),
iii) in my case (b/c it's a co-op), I'm told that co-op boards are far more likely to approve an all-cash buyer because there's no concern that the buyer could default on the mortgage, and then there'd be a lien on the property...this may not seem like that big a deal, but I'm told that it's not at all uncommon in Manhattan for a sale to be essentially completed on paper, only to have a picky co-op board reject the applicant...so I've been told not to discount the fact that my all-cash offer would give the seller more peace of mind that I'll be approved by the co-op board.

OK, that's all the info I have to give.

EDIT: Thanks, Zee, for the reply. All the points you make are ones that I've also thought about, re: all-cash really not being as huge an incentive as I initially thought it might be; sure it's a great "tie-breaker" if two offers are otherwise equivalent, but that's why I made this post >> to inquire whether it was just a good "tie-breaker", or whether I might reasonably expect to be able to get away with a lower offer.

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The seller being in the position that he is in, I doubt it'd make much difference to him either way. The first thing that you should do is go down to the county courthouse and find out how much he owes on the property. You do that by finding out what the original mortgage amount was and then making an amortization table at a reasonable interest rate. That'll give you a ballpark baseline price that you can be pretty sure that he's not going to go below.

Then what I would probably do is meet with the seller and ask him directly what he needs. As a buyer, you can reserve the right to be present when your offer is presented to the seller (don't give the offer to the agent before hand). Get together with the guy and explain that you can pay cash and close in seven days - that you're offer is not contingent on funding. Offer a decent earnest deposit - like $15,000 to let him know you're serious. Tell him that you've narrowed down your selection to three places, his and two others, and you're meeting with the other buyers over the next two days. Give hime your offer, and make it low - like just a bit less than the amount ke owes. He'll reject it out of hand, but then it'll be his turn to say a number.

Now, you already know what his absolute bottom price is, but he doesn't know what your top price is, so you're at a huge advantage. His number will be too high, no matter how low it is. Just say, "look, i checked with the county, and it appears that you owe somewhere in the ballpark of $X for this property. If I give you $X, you'd have made an X% return on this property. The market is bad and its hard to get jumbo mortgages right now. I'm the best prospect that you've got." You might even consider bringing a banks statement showing that you've got the cash available.

Talk to the seller directly, it'll pay off. You want to get a signed contract. No waiting a day or two and thinking it over - keep harping on that you need to buy quickly and that you're going to start negotiating with two others in the next few days. You don't have time to wait and need a decision, blah blah blah.

Its a buyer's market. Put the screws to him.