“Cash is king”—in a hot real estate market, this adage is definitely true. At the height of the market last summer, we saw all-cash offers become wildly popular. The market has begun to moderate slightly, but cash offers are still hot.
If you’re thinking of selling your home, you might be wondering about all-cash offers. What are they, exactly? What does receiving an all-cash offer mean for you as a seller? Finally, should you be prepared to make an all-cash offer when you look for your next home?
We’ll run through the answers to these questions so you feel prepared for your next real estate transaction.
What is an all-cash offer?
An all-cash offer is when a buyer is able to pay for a home without taking out a mortgage. Logistically, this usually means the buyer is paying with a certified check or sometimes a wire transfer. They might truly have that much cash, or they might be borrowing it—just not borrowing it against the property (as with a traditional mortgage).
Effectively, cash offers waive what’s known as a financing contingency. When a home is purchased with traditional financing, the financing contingency usually states that if the financing doesn’t come through by a certain date, the buyer can walk away—WITH the money they put down.
In a cash sale, the buyer waives this ability to walk away with their earnest money if something happens and they can’t finish the deal. The seller would get to keep any down payment the buyer had made. Therefore, the size of the down payment is important in an all-cash offer; the bigger the down payment, the more serious the buyer appears and the more likely the seller is to accept their offer.
What does an all-cash offer mean for you as a seller?
Selling your home for cash is simpler and faster than selling with a financing contingency. You know the buyer is serious as long as they put down a substantial down payment, and there’s much less risk of the sale falling through. You also remove the risk of your property appraising lower than what the buyers offered—when this happens, a buyer has to cover the difference between the appraisal amount (which their mortgage will cover) and their original offer. If they don’t have that extra cash, they’ll have to walk away. Lastly, an all-cash deal can close much faster than one involving financing.
Should you be prepared to make an all-cash offer for your next home?
If you’re selling your current home to buy a new one, you might want to be prepared to make an all-cash offer as a buyer, as well. A cash offer makes you a much more competitive buyer, for all the reasons we’ve reviewed above. Don’t miss out on your dream home due to financing!
If you see the benefit of all-cash offers both as a seller and a buyer, we’d love to help at MarketPro Homebuyers. You can list your home on the market and hope for a cash offer, or you can get one now from MarketPro. When you sell your home to us, you’ll get the cash you want without the stress, time, and money spent listing your home the traditional way.
Work with MarketPro:
We’ll give you a fast and fair 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. Sell your home the easy way so you can be ready to make an all-cash offer on your dream home!
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.