Sometimes cash is king. While cash often brings strength to an offer, and you don’t risk the volatility of a buyer who is subject to getting a mortgage to buy your property, is the cash offer always the right deal for your home sale?

The Appeal of Cash:

  •  The first thing you need to address when you receive an offer is strength of the prospective home buyer. How strong are they financially and how likely are they to be able to close? A cash offer is always worth considering, because a failure to obtain financing is one reason why deals fail to close. In the era of strict lending criteria, some buyers may not qualify for a mortgage. In other scenarios, lenders decline financing because the appraisal amount comes in lower than the purchase price. When the buyer Is paying cash, some risks are eliminated.

The Deep Discount Catch:

  • Some cash buyers are investors looking to flip your property for a fast profit, according to recent research by Goldman Sachs. Investor offers almost always come at a deep discount.  You can take the all-cash offer, and it’s a safe bet that you’ll get your cash at the end of the day – BUT – that cash may be considerably lower than your home’s market value – often by 15-20 percent or more.

How Big Of A Risk Is The Financed Buyer?

  • Many buyers may state that they are pre-approved for a mortgage. Pre-approval letters are not all the same. Some lenders will take the time to verify the borrower’s financial background; others will do a preliminary phone consultation and issue an approval. It’s up to the seller(s) and their contracted Realtor to decide which approval letters are credible. Most experienced Realtors insist that offers come with a mortgage pre-approval. Pre-approved buyers have typically passed the bank’s financial interview process – including credit checks, income, asset verification and verification of debts. It’s not cash, but it’s likely the next best thing in terms of solidity.

Choosing the Best Deal:

  • The best offer is a cash offer at full asking price with no contingencies and closing ASAP. Not surprisingly, these offers are rare. Often, the seller must choose between a discounted cash offer and a higher financed offer.  The offer deemed by the seller to be better can depend on a number of factors. (ie – whether the financed buyer is pre-approved, the contingencies that are part of the offer, and how quickly the buyer can close. Don’t be pressured by your agent or anyone else into choosing a certain offer.)

After all, at the end of the day, a closed transaction results in ‘cash in your pocket’ as a seller – thus the reason some sellers don’t place preference on cash over financed offers.

If you’d like professional seller representation,

call The Jennifer King Team @ 717-723-9080!

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