If you put a for-sale sign in the yard, you’re hoping to attract buyers. A best-case scenario would be that multiple prospective buyers enter a bid war, giving you the pick of the litter. For most home sellers, receiving a cash offer is beneficial in several ways.
Real estate horror stories typically include tales of buyers who were unable to secure a mortgage to fulfill their offer on a home. Imagine thinking all the wheels have been set in motion, and you’re just a few steps away from moving into your own new home, only to have it all come crashing down when you learn that your buyer’s loan didn’t go through. It’s a seller’s nightmare.
Here’s why home sellers like cash offers
A cash offer is not a guaranteed best offer. Home sellers must understand the potential downsides of such offers, including the fact that many buyers who offer cash expect a discount, meaning a lower sales price. The following list, however, shows three benefits that make cash offers attractive to sellers:
- There is no risk of a mortgage deal falling through.
- Cash sales are often able to close in two weeks or less.
- Buyers who offer cash may be willing to waive appraisals and inspections.
If you’re hoping for an expeditious process without contingencies, accepting a cash offer might help you achieve your goal. Keep in mind, however, especially if you have numerous offers on the table, it doesn’t necessarily mean the cash offer is, by default, the best.
Consider other offers if you have buyers engaged in a bid war
If you have multiple buyers interested in purchasing your home, you’d be making a mistake to automatically accept a cash offer without first reviewing the others. In fact, you might have a buyer with a pre-approved mortgage who is willing to pay more than the list price to gain an edge over the other buyers. If your primary goal in selling is to make as large of a profit as possible, it would be wise to weigh your options.
As mentioned in a previous section, closing on a cash offer may take place sooner than a mortgage-backed deal, which, in many cases, can take anywhere from 30 to 60 days. If you’re strapped for time when selling your home, then the cash offer might be the way to go. In short, accepting a lower offer (in cash) might be more beneficial than a higher, financed offer, if your priority is to close the deal as quickly as possible.