Whether you’re selling your home to finance a new one or because you need to relocate for work, it’s likely that you’d prefer a quick, simple process. Cash offers provide that.
As of 2018, cash sales accounted for up to 24% of single-family and condo home sales in the US. A cash offer is when a buyer offers you the amount of money you’ve listed your property for in exchange for your property right away without any financing involved.
Investors, who can be a good fit for some homes, are often the ones who make cash offers. However, you can also see this type of offer from people who need to sell their current home due to a divorce settlement or a financial crisis. People who want to buy a fix and flip to turn around and make a profit, for example.
So why are cash offers so much more advantageous for sellers than financed offers? The main reason has to do with the fact that the lender is removed as a third party. When you’re dealing with a cash offer, the buyer has enough liquid assets to write a check for your home in full, meaning they don’t need to secure mortgage financing first.
This provides a lot of peace of mind for the seller. You know that the deal is going to close and there’s no chance of a financing failure pulling the plug on the sale at the last minute. That confidence can be a huge plus for sellers who have invested time, energy and money into listing their home.
Another key benefit is that cash buyers can close on your house much faster than a financed buyer. When you’re working with a mortgaged buyer, there are always the contingencies that must be met for the loan to fund and complete the purchase, which can slow down the process. But when you’re selling to a cash buyer, these types of conditions don’t apply, so closing can occur much more quickly.
There are several other reasons why a cash offer might be better for you as a seller. Some buyers may be more motivated than others to close the deal. This can include investors who are looking to maximize their profits, people who need to relocate for work and more. If you’re looking to sell your home as quickly as possible, a cash offer from a reliable iBuyer or homebuying company can help speed up the process.
What’s more, with companies like Flyhomes and Knock enabling you to make cash offers without actually having the funds, it’s easier than ever for people to take advantage of this opportunity. So, while you might be able to find some other uses for that Scrooge McDuck-sized pool of cash, it can be worth considering an all-cash offer if it’s a viable option.
Ruben Caginalp is a former associate writer on Bankrate’s Home Lending team who covered real estate, mortgages and more. He holds a bachelor’s degree from Fordham University and began his professional career with Bankrate in January 2022.
