There is a lot of competition amongst buyers in our housing market. There are simply more buyers than properties available. There also happens to be quite a few buyers with access to a lot of cash, which they’re willing to spend on real estate. These all cash buyers can be quite appealing to a seller in any market. Let’s explore why…
A cash buyer does not have a loan contingency. Their offer is not contingent upon a lender allowing them to borrow money to finance the purchase a home. Financing is readily available today, and the terms are quite favorable, but a borrower still has to qualify. A lender has to underwrite the loan, appraise the property, and ensure the borrower has the means to pay the mortgage. A financed borrower simply has one extra hurdle to cross.
With no loan contingency a cash buyer can close fast! It only take a few days to open escrow, sign paperwork, and wire in money. A cash deal can close in a week. A quick close is quite appealing to many sellers as it puts cash in their pocket sooner!
A cash buyer doesn’t need an appraisal. While many buyers are waiving their appraisal contingency (meaning they’ll make up the difference is the bank comes back and says it’s worth less than the contract price), a lender still requires an appraisal be completed in most cases. This holds true unless a borrower is buying a primary residence and putting down 30% or more, at which point many lenders are granting appraisal waivers. If an appraisal comes back low it can ruin a transaction. If it comes in late it can delay a transaction. If it requires repairs then it can change a transaction and bottom line for the seller. Avoiding these hassles is a reason why a seller would go with a cash buyer.
Market Real Estate has access to a program that can turn any buyer into a cash buyer. This program levels the playing field in the housing market, and it can be the difference between landing your dream home instead of missing out. Reach out to us for more details.