Most parts of the country are seeing a strong seller’s market. Inventory is low and buyers want to take advantage of the low interest rates. As a result, sellers may be in the enviable position of a bidding war. Some buyers believe that presenting an all-cash offer to the seller is more attractive, can earn them a lower price and that cash is always King. But, as a seller, should you accept a lower price from a buyer just because it’s cash? The short answer is: It depends. Do you need to close quickly? What are the terms of the offer?
The best advantage of an all-cash offer is the potential to close faster than an offer with financing. Typically, loan processing will take several weeks from appraisal to underwriting. A cash offer can be completed faster, often in a matter of days. If it’s important for you to get the money quickly, then accepting a slightly lower sales price in return for the speed of closing could be worth the cost.
However, even if the offer is all-cash, that doesn’t guarantee it will close any sooner than another offer with financing involved. The most important consideration is the terms of the offer. Even though there is no lender involved with a cash offer, it might still be contingent upon an appraisal, a home inspection, and other standard contingencies.
Simply paying in cash by itself does not guarantee that the sale will close any faster than a well qualified buyer who will use financing. The bottom line is that before discounting your home price for an all-cash buyer, compare all the offers. If the speed of closing is important and the offer has few to no contingencies, then a small discount might be warranted. But if this is not the case for you, be sure to consider all of the terms carefully before assuming an all-cash offer is always better. Select the best offer for you and your circumstances.
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