In a hot real estate market, you’re probably hearing more and more about cash offers. They are often seen as a great way to get a better price, and they can be a good option for both buyers and sellers. If you’re thinking about making a cash offer on your home, here are some reasons why it may be better for both parties:
A Cash-Backed Bid is Better for Sellers
In many cases, a buyer with a mortgage can come with financing contingencies that can slow down or even derail the sale. A buyer without a mortgage, on the other hand, won’t have to worry about the mortgage process at all, which can help speed up the sale.
A Cash-Backed Bid Is Better for Buyers
For homebuyers, a cash-backed offer can also be more appealing because there are fewer financial strings attached to it. For example, a mortgage loan means the buyer will have to pay for things like appraisals, inspections and title work. These can be expensive and time-consuming. More info https://www.fastcashmyhome.com/sell-my-house-fast-des-moines-wa/
A cash-backed offer can also be easier to negotiate. This is because the seller doesn’t have to deal with a financing contingency, and because the buyer has less risk of falling through on the loan.
The buyer’s money can also be used to cover buying expenses, such as property taxes and moving costs. That can make a cash-backed purchase less expensive in the long run, says veteran real estate coach Jeff House.
Another advantage of a cash-backed bid is that it can be more flexible than a mortgaged bid. For instance, a buyer with a mortgage can have a hard time getting a home approved by a lender if the rates are rising. A cash-backed buyer, on the other hand, can be more likely to have a lender approve the loan.
Especially when the rates are volatile, it’s important to have finance contingencies in place so that a buyer can back out of the deal if the lender doesn’t meet their requirements. This can be especially useful in a seller’s market where the buyer might have an existing mortgage on another home.
In the long run, though, a cash-backed bid can be better for both parties. It’s easier to negotiate, it can be cheaper and less stressful.
Cash-Backed Offers Are Not Always Better
In some instances, an all-cash offer is actually worse for a seller. For example, if other offers have already come in and the cash buyer doesn’t match them, they can end up losing out on a big commission if they don’t get the deal.
As a seller, you should always keep this in mind and make sure to ask for a fair market price for your home. If you do, you’re more likely to end up with a high offer from a qualified buyer.
Moreover, it’s wise to remember that not all cash buyers are legitimate. Some are scammers who want to take advantage of unsuspecting homeowners. They will write letters that say they’re going to buy your home for all-cash.