Why sellers like cash offers
While it’s true that almost all sellers like cash offers, some sellers will even choose all-cash purchase offers over a higher-priced offer with conventional financing. But why? Simply put, sellers know that a cash offer, with proof of accessible funds, faces fewer hurdles and is, therefore, more likely to close.
For instance, lenders require that homes are appraised before closing if the transaction value is greater than $400,000 — and appraised value that doesn’t match the amount of a mortgage can lead to a dead-end if the seller isn’t willing to come down on their price or the buyer isn’t able to come up with a larger down payment.
Even buyers who are completely qualified for the necessary mortgage loan can get caught up in a number of technicalities or contingencies. For instance, buyers’ qualifications could possibly change upon closer scrutiny. Or, maybe the buyer wasn’t employed in the same occupation for the last 2 years, or their financial situation or credit rating changed before closing because he or she purchased a new car or was a victim of identity theft. If a buyer is purchasing in cash, none of these types of problems can derail a potential sale.
Also, cash sales take less time, since cash buyers don’t always need the 30 to 45-day window to close if they don’t need to obtain a loan. Once the inspection is complete and any other contingencies have been satisfied, the closing can take place as quickly as a week. And a faster closing puts cash in a seller’s pocket sooner — music to any seller’s ears.