When it comes to buying a home, cash offers are often the most attractive option for sellers. Cash offers provide a number of advantages over mortgage offers, including faster closing times and fewer risks. A cash home buyer doesn't need to get a mortgage, as they already have the cash for the purchase. This means that the mortgage application and approval process can be bypassed, drastically simplifying the process for the seller.
Cash offers also provide more confidence to sellers, as they know that the buyer has the funds available and that the agreement can take place if both parties want it. In a competitive market, sellers will benefit from accepting a cash home purchase offer instead of a mortgage buyer. This is because there is no need to deal with lenders and all of their rules required to get a loan. Sellers often save time and money when they have a cash buyer who is less likely to request appraisals or home inspections (although they should request them).
Cash buyers are also common in competitive seller markets, where funding delays can cause the seller to accept a more attractive offer. Cash offers tend to be lower than the total market value of the home, but buyers must demonstrate financial standing to the seller before moving forward. With the help of an iBuyer, sellers have access to an exclusive group of buyers who are willing to pay cash for their home without waiting weeks or months to receive an offer. In most cases, the best cash offer will receive a counter that brings it closer to the funded offer, but perhaps not up to that amount.
Ultimately, cash offers are very attractive to sellers because they tend to close faster and there are fewer risks than with contingent mortgage offers.
