Why Cash Offers Are More Appealing to the Seller in Real Estate
In a financial environment where many loan suppliers are now tightening their purse strings, there’s been an increase in the number of money buyers seeking to invest in real estate. Whether the purchase is created directly with money or via a mortgage, the seller gets the same sum of cash (although not in all scenarios).
So why is cash more attractive than an offer to buy with a mortgage? The response ties in with all the three things that most sellers need from any trade (besides a reasonable price); a quick sale, one which is sure to go through, along with the ability to move on. This combination is what gives money buyers an advantage in procuring their pick of property over those who must seek outside funding.
The Speed of this Offer.
Cash buyers already have everything they need to proceed with the transaction; they are only trying to find an appropriate home and a ready buyer to make an offer. If you are planning to borrow to be able to join the property market, it is not that easy. They could make offers, but they are not endorsed by anything tangible until they get approval for a loan.
For those looking for outside finance, an offer is much more of an intention than a direct request to purchase the property. Cash buyers have this power, and it allows them to give the seller a concrete deal to mull over nearly immediately.
The Certainty of Closing.
Offers created on the contingency which financing is available are completely reliant on external sources. If they are not approved to get financing, then the purchase cannot go ahead. On the other hand, cash buyers hold the entire world in their hands and are completely in control of their proprietary destiny. Sellers know that an offer of cash is much more of a sure thing than the offer to buy with a mortgage.
This certainty is indeed so appealing to some sellers they’re even eager to take significantly less than their asking price, or significantly less than some competing offers just to be certain the sale will proceed. Bringing a finance company onboard can ruin the deal at any given moment, cash does not have this issue.
The Flexibility to Move On.
Having a prompt offer that can fall apart if either party chooses to back out, stems the flexibility to move on as soon as possible. No dealer would like to go through a long, protracted sale procedure, and money buyers are a sure way to avoid this. Cash buyers make it possible for sellers to proceed with their own life, which often leaves it a more appealing prospect than a person who must await financing.
If you can buy your next bit of property on a cash basis, you will now realize why this may give you an advantage.