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 answer is in the three items most sellers want from any transaction (aside from a fair price); a quick sale, and also being able 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.
Cash buyers already have everything they require to go ahead with the transaction; they’re just trying to find an appropriate property and a willing buyer to make an offer. For everybody else that wants to borrow to get into the property market, it isn’t quite that easy. Yes, they can make offers, but they’re not backed by anything concrete until approval for a loan.
In the case of the seeking outside finance, an offer is more of a goal than a direct request to purchase the property as soon as possible. Cash buyers possess this capability, and it allows them to provide the vendor a tangible deal to mull over almost instantly.
The Certainty of Closing.
Offers made on the contingency which financing will be found are dependent on external funding. If they are not approved to get financing, then the purchase cannot go ahead. Conversely, cash buyers hold the entire world in their own hands and therefore are entirely in control of their very own proprietary fate. Sellers know that a cash sale is much more of a sure thing than an offer to buy via a mortgage.
This certainty is so attractive to some sellers that they can even accept less than their asking price, or significantly less than any competing supplies, to be sure the sale will go through. Bringing a fund company into the mix ca collapse the deal, but cash does not have this problem.
Ability to Move On.
Having an offer that can fall apart if either party decides to back out of this agreement, gives rise to flexibility to move on as soon as possible. It is quite simple no dealer wishes to experience a lengthy, protracted sale procedure, and money buyers would be the best 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 do have the ability to Purchase your next piece of real estate with cash, you will now realize why it gives you the upper hand.