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Why a Cash Offer is Better When Buying a House in Oakland

June 2, 2022 | 6 Minute read

You’ve decided it’s time to buy a home — congratulations! If you’ve spent any time looking at houses, you know that the real estate market in Oakland is hot right now. As a buyer, you want to make your offer competitive and get the upper hand. One of the best ways to stand out among other buyers is by making a cash offer on a home. Read on to discover why it’s your best choice when purchasing a home in a hot market.

Why do sellers like cash offers?

Many sellers will choose an all-cash offer over a higher-priced offer with a conventional home loan, usually because they know that a cash offer with verified proof of funds is more likely to close.
If you obtain a traditional mortgage, your lender will require the home you are purchasing to be appraised before closing. If the appraised home value comes back lower than the amount of your mortgage, this could lead to trouble. You may need to either negotiate with the seller to lower the price of the home, or be responsible for covering the difference. In other words, your lender will only allow you to borrow the appraised value of the home. A cash offer eliminates this step since an appraisal is not required. However, as a buyer, even if you are making a cash offer, it’s often a good idea to order your own appraisal so that you have peace of mind that you are not overpaying for the home.

What are the benefits of a cash offer?

Most buyers in Oakland (and the rest of the country) need to secure financing in order to purchase a home, as it is challenging to save up enough cash to make an offer on a home without involving the help of a mortgage lender — especially in a competitive California market. But it’s no secret that sellers love cash offers, and will usually accept them over traditional mortgage-backed bids.
Here are some of the benefits of placing a cash offer:

  • You can eliminate contingencies. Using cash makes your offer much more competitive and appealing to sellers as it eliminates the finance, home sale, and appraisal contingencies.
  • You can increase your odds of offer acceptance. Sellers love cash offers and will take them over traditional mortgage-backed offers 9 times out of 10. A cash offer can increase your chances of winning a home by 3x.
  • You can command better terms. Making a cash offer allows you to be in the driver’s seat when negotiating a deal with the seller and close on your terms. Oftentimes, cash buyers close under the asking price.
  • You can close faster. You will be able to close much faster on a home as a cash buyer than you would with traditional financing. This fast timeline can be very appealing to sellers — again, especially if they are in a hurry to sell. With Reali’s Cash Offer program, you can even do a 10-day close.

Are there any downsides to making a cash offer?

While it is easy to see the benefits of a cash offer on house in Oakland, many buyers can’t help but wonder if there are any downsides. Of course, there are always trade-offs when purchasing a home, and making a cash offer is no exception. By using your own cash to pay for a home, you will have fewer liquid assets. This can be a problem if you plan on fixing up the place or need additional funds for other expenses.
The good news is that when you leverage Reali Cash Offer, you can use our funds to pay all-cash for a home and spare your savings account. It’s a win-win if you ask us!

The bottom line

We are in the middle of a historically strong seller’s market where sellers, especially those in Oakland, are more likely to receive cash offers right now. If your offer is financially similar to those from other buyers, paying all-cash makes you the obvious choice because of the benefits to the seller. And even if your cash offer isn’t quite as strong as a financed offer, it may be enough to persuade the seller to accept it, simply because it is more likely to close.
But if you don’t have briefcases full of money lying around, don’t worry — Reali’s Cash Offer program helps everyday buyers become all-cash buyers. With the Reali Cash Offer, we’ll front you the cash to place an all-cash offer on the home you want so you can cut to the front of the line. No appraisals and no major contingencies mean a simple, faster transaction.
To learn more about the Reali Cash Offer program or to inquire about our innovative financing options, contact us today. We look forward to serving you!

Your home is your biggest investment, so make the most of it. Buy your new house with the power of cash, move in faster than ever before, and let a local Reali Agent handle the rest.

More on Home Buying from the Reali Blog

From your first home to your forever home, Reali has a smart solution to help you on your journey. Learn more about Reali’s products and services across California, and explore real estate topic and trends.

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