Insights Into Making A Cash Offer On House
Since the 2008-2009 recession, cash oﬀers have become more prevalent! In today's current real estate market, this is especially so. Still, cash oﬀers are more common in some markets than others. And for buyers trying to ﬁnd a house in an area where cash oﬀers are in high demand, competing against those oﬀers can be an intimidating part of the homebuying process.
If you intend to purchase a home in such a market, you need to understand how a cash oﬀer on the house works. And what makes such an oﬀer attractive to sellers. Once you've gained more inside knowledge, you will be able to write your compelling oﬀer.
When imagining a cash oﬀer, you might envision someone approaching a seller with a suitcase full of neatly stacked "Benjamins", saying they're ready to hand it over, but that's not the reality.
A cash oﬀer means that a buyer already has the funds to purchase the home and can pay for it without obtaining a mortgage loan. From the home seller's point of view, it doesn't make much diﬀerence whether the cash comes from the buyer's bank account or a mortgage loan.
However, the associated contingencies that come with additional risks for the seller - are where the most critical distinctions between a cash oﬀer and an oﬀer backed by a mortgage loan come into play.
The most apparent contingency with an oﬀer that requires ﬁnancing is, of course, the ﬁnancing itself. Though you can and should present your purchase oﬀer with a prequaliﬁcation or preapproval letter from our lenders, these funds aren't sure until the loan is fully approved.
In addition, from a seller's point of view, if two oﬀers are identical and one buyer can pay cash, the cash oﬀer is likely to be viewed as the stronger oﬀer.
Advantages Of A Cash Offer
What Kind of Buyers Oﬀer Cash?
While technically anyone with available funds can oﬀer cash when buying a home, cash buyers tend to fall into a few diﬀerent categories.
Investors commonly oﬀer cash when buying homes to either ﬂip or hold onto to rent out. More experienced investors tend to buy and sell homes often, so they're likely to have the cash resources on hand that allows for paying out of pocket rather than securing a mortgage loan for each property they purchase.
Homebuyers who are downsizing maybe lean towards paying with cash. While the size of a house doesn't necessarily dictate its market value, it's not uncommon for the sale of a large house to produce enough proﬁt to turn around and purchase a smaller property without the fuss of ﬁnancing.
Additionally, buyers backed by a cash-purchase product can present a very attractive cash oﬀer on a home they love.
If you're prepared to submit a cash oﬀer on a home, our team is ready to help! Our USAdvantage Program could be the exact ﬁt for your situation and could get you into your new home sooner than you may have planned.