July 30, 2020
3 MINUTE READ
A cash offer, an all-cash bid on a home, means that the buyer wants to purchase the property without taking out a mortgage loan or pursuing other financing options. Depending on the current climate of the real estate marketplace, paying cash for a home has significant benefits to sellers — which can strengthen the negotiating position of a buyer who can afford to pay for a home with cash.
Of course, while it’s true that all home sales lead to cash in the end for a seller, the harsh reality of financing a home means that there can often be obstacles or hurdles that stand in between the seller and the final sale. So, it comes as no surprise that sellers usually want to work with buyers who face the fewest obstacles.
But will an all-cash offer help give you a better chance at landing your dream home? Let’s take a closer look.
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.
While it’s clear that making a cash offer is appealing to sellers, does it improve your chance of getting the home you want? To put it simply: yes. Providing an all-cash offer gives you a tremendous advantage — in fact, it has been reported to increase your chance of success by more than 200 percent. Real estate experts agree that all-cash offers are impressive, and generally seem stronger and more attractive than similar financed options. After all, cash is king in just about any market, including real estate.
Reali Cash Offer gives you a competitive edge in the real estate market by increasing your chances of winning the home you want — and at a lower price. But don’t just take our word for it. Meet Reali Cash Offer buyers, Audra and David. These first time home buyers found the home of their dreams, but quickly learned the house had multiple offers. By working with Reali and using Real Cash Offer, they were not only able to buy their dream home, they also got it for $12,000 less than the list price.
“Coming in with that cash offer saved us money because we were able to offer under asking price,” said Audra. “I really think that is a great benefit of the cash program – being able to negotiate down. We are so grateful for Reali.”