When it comes to selling a home, cash offers are often the preferred option for sellers. Cash transactions tend to close faster and are generally considered a stronger offer than those that require financing. This is especially true in a seller's market or in a market where there is limited inventory. Cash buyers have an advantage over those who must obtain financing, as they avoid many of the costs associated with closing a loan and don't have to worry about mortgage interest payments.
Cash offers don't just come from the super-rich or Wall Street investors. Some cash buyers can even pay cash and then refinance later to take advantage of historically low rates. According to an Opendoor survey, 75% of sellers say that a funded offer would have to be 10% higher than a cash offer to win a bidding war. Cash buyers should take care of securing a title and custody company, and have an experienced buyer agent (and possibly a real estate attorney) to ensure that the paperwork is complete and correct.
A cash offer completely eliminates the uncertainty of the appraisal process of the home sale equation. There is no requirement to get an appraisal, which can be beneficial for both buyers and sellers. As Dugan says, “The seller has a better guarantee that the transaction will close in cash.” Often, home sellers choose a cash offer rather than an offer that will be financed by a mortgage, even if the cash offer is lower. An appraised value lower than the amount of a mortgage can mean cancellation of the contract if a seller does not lower the price or if a buyer does not increase the down payment.
On the other hand, a cash transaction can close in just two weeks, which is much less time to worry about a sale not taking place. Cash offers are attractive to sellers because they tend to close faster and are generally considered stronger than those that require financing. Cash offers don't just come from wealthy investors; some cash buyers can even pay cash and then refinance later to take advantage of historically low rates. According to an Opendoor survey, 75% of sellers say that a funded offer would have to be 10% higher than a cash offer to win a bidding war. Cash buyers should take care of securing a title and custody company, and have an experienced buyer agent (and possibly a real estate attorney) to ensure that the paperwork is complete and correct. A cash offer completely eliminates the uncertainty of the appraisal process of the home sale equation, as there is no requirement to get an appraisal.
As Dugan says, “The seller has a better guarantee that the transaction will close in cash.” Often, home sellers choose a cash offer rather than an offer that will be financed by a mortgage, even if the cash offer is lower. Cash offers provide many benefits for both buyers and sellers. They tend to close faster and are generally considered stronger than those that require financing. Cash buyers avoid many of the costs associated with closing a loan and don't have to worry about mortgage interest payments. Cash offers also eliminate the uncertainty of the appraisal process as there is no requirement to get an appraisal. In conclusion, cash offers are attractive for both buyers and sellers because they tend to close faster and are generally considered stronger than those that require financing.
Cash offers also eliminate the uncertainty of the appraisal process as there is no requirement to get an appraisal.
