During the last couple of years in real estate, all-cash offers experienced a boost in popularity. The market was on fire, and cash was sometimes necessary to win.
If you’re considering buying or selling a home in 2022, you might be wondering how hot the market is now and whether or not cash offers are still winning.
Well, we know that the real estate market is still hot; it’s cooling very slowly, but supply is still outpacing demand. We expect real estate prices to continue to rise—just not as quickly as before.
With all this in mind, we put together this 2022 guide to cash offers. We’re going to run through what an all-cash offer is, how common they are now, and how to win in a cash-is-king environment.
What’s an all-cash offer?
An all-cash offer is when a buyer is able to pay for a home without taking out a mortgage. They might truly have enough money sitting in their bank account, or they might be getting the cash in some other way, whether it’s liquidizing assets or borrowing money (but not against the property, as with a mortgage). A cash buyer usually pays with a certified check or a wire transfer.
Sellers tend to love cash deals for several reasons. There’s no waiting for the mortgage underwriting process or other paperwork to go through, and closing is much faster with cash. Cash is also a sure thing; you don’t have to worry about the buyer’s financing falling through, whether it’s because of a total denial or a low appraisal where the buyers don’t have the extra cash to supplement the mortgage. Overall, a cash sale is simpler, faster, and less risky for the seller than a financed sale.
How common are all-cash offers?
According to the Zillow Consumer Housing Trends Report 2021, “In 2020, 28% of buyers said that they paid for their home in full without a mortgage. In 2021, that share grew to about a third (32%).” According to the April 2022 REALTORS® Confidence Index Survey, cash sales were at 26% as of April 2022. With a solid quarter of sales going to cash offers, you want to have strategies to win in an all-cash environment.
Tips to win in an all-cash market environment.
According to analysis by Redfin, all-cash buyers are four times more likely to win in a bidding war. If you can’t swing a cash offer, though, here are some ideas that might help push your offer to the front of the pack:
- Consider waiving the financing contingency. According to Redfin’s report linked above, this makes your offer 31% more likely to win.
- Conduct a pre-inspection. From the same report, this improves your offer’s chances by 25%.
- Write a “love letter” to the sellers. If all the other factors are close, your personal story might help sell your offer!
- Bid at least 1% over cash offers, if you can.
We hope these tips are useful to you as you make a bid for your next home!
One last note—to get the cash needed to win the bid on your next home, you will likely need top dollar for your current home. Helping you do that would be to avoid realtor fees, costly repairs, and even the time it takes to stage and put your home on the market. To get all of that working on your side and to guarantee a cash offer on your current home, we have a great solution for you…
Work with MarketPro Homebuyers!
We’ll give you a fast cash offer for your current home just as it is now; no repairs, no inspection, no commissions or fees. You can even choose your exact closing date to coordinate perfectly with the purchase of your new home. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you’re in Washington, D.C., Maryland, Virginia, or Pennsylvania, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.