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A couple of quick questions on some investor terms I've heard

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  • A couple of quick questions on some investor terms I've heard

    What does it mean when someone says 'they left the deposit in' I know it means that the house was purchased for an amount under RV (I think)... but when you find a purchase under RV, dont you always have to actually pay the deposit anyway?

    And, what does it mean to offer 'cash' Does it just mean that you've had finance approved, or does it mean you won't need finance, because you have the cash?

    Thanks in advance!

  • #2
    I am lead to believe Cash means you are not dependant on the sale of another property.


    • #3
      while technically cash is cash, I interprete a cash offer as not being subject to the sale of a property or arranging finance. A cash offer is better than an offer that is subject to finance which is better than an offer that requires a house to sell (especially in a slow market).

      On my PPOR, I made a 'cash' offer and just hoped like hell a bank would give me finance.


      • #4
        Leaving a deposit in is when the purchaser will effectively have 2 mortgages - 1 to the bank, and another to the owner you are buying off. This could be interest free or have interest payable, and will have a time frame for repayment. It's also called leaving cash in, a deposit implies less $.

        Cash is when you have the cash in the bank, or as close as - as CJ says above. It means you put in an offer with the finance clause crossed out. Often these offers are light on conditions too, so they just sail through. For this certainty, the seller will often take a lower price.


        • #5
          Thank you very much!
          Great, we're in the position to make a cash offer. Hopefully we can save some money. . .