Everything You Need To Know About All-Cash Offers
An all-cash offer is exactly what it sounds like: it happens when a buyer wants to skip the lending/financing step in the home buying process and offer you cash for your home. As a seller, this is appealing for many reasons, including that it lowers the risk of the sale and speeds up the sale process.
There are many different reasons why a motivated seller would accept a cash offer. If you’re thinking about going this route, it is important to understand the basics of a cash offer so you can decide if its the right option for you
Reasons A Buyer Would Offer All Cash
There are a few different reasons why a buyer would present an all-cash offer instead of utilizing traditional financing. Some of these include:
- A seller just sold their home and has the capital to put towards a new home
- A seller wants to stand out in a competitive market
- The property needs repairs and is being advertised for sale “as is”
- A local and professional home buying company (like Texas Home Buyers) wants to purchase the property.
How Cash Offers Change The Game
There are many reasons why someone would submit an all-cash offer on your home. It is important to weigh your options and understand how this kind of offer could change the selling process. An all-cash offer can:
Speed up the sale process
Because the buyer doesn’t have to get pre approved, wait for funds, sell their assets to have the money for the sale, things move much faster with a cash offer.
Eliminate the need for underwriting and extensive documentation
All cash offers require less documentation and paperwork than offers using traditional financing. This helps speed up the process and makes the entire transaction more manageable.
Simply the closing process
When a buyer utilizes traditional financing, they have to wait for the lender to analyze their credit history and financial status, and this could take time. All-cash buyers can bypass this step and simplify the closing process. With cash offers, a sale can be complete within days instead of months.
Things To Consider Before Accepting A Cash Offer
A cash offer can seem very appealing, especially to a seller who wants to sell a property as-is and is on a strict timeline. But before you say yes to the first person who offers you cash, consider these things:
- Determine the source of the cash. Does the seller have actual liquid capital that they can use to purchase the property? Or are they sitting on assets that they’ll have to sell first to generate the money? These are important things to consider, as it could significantly impact your selling timeline.
- Although there are fewer contingencies for all-cash purchases, buyers are still allowed to request an appraisal before they sign a contract. This means that even though they have cash, they may find repairs that need to be done and other issues with the home. Your options are either to take care of the repairs or negotiate a lower price. (This is not the case with Texas Home Buyers. We’ll take your house as-is, no contingencies!)
- Because a cash offer is so appealing for so many reasons, buyers may use it as a bargaining tool. Many times a buyer will come to the table with an all-cash offer that is less than the asking price. This is when the seller must decide whether he/she wants the money now or is willing to wait around for a higher offer. For sellers on a time crunch, taking a slightly lower cash offer is the best option.
When To Consider A Cash Offer
All cash offers simply the sale, speed up the process, and require a lot less work on your end. If you have time and are willing to wait for the perfect offer at asking price, waiting for a qualified buyer with traditional financing may be the way to go. But if you’re like many sellers who are eager to get on to their next chapter, don’t want to put any work into the house, and need the sale to happen quickly, a cash offer is the best option.
It comes down to how much time you have, how much work you’re willing to do, and how much money you need to walk away with.
A cash offer takes the time and complications out of the home buying process. Contact us today to get started on a cash offer on your home.