Suppose I’m selling my house for $800k in California. I have a buyer with a traditional financing arrangement (30 year loan) and a cash buyer. As the seller, I get my money regardless of whether a bank pays me or an individual cash buyer. Why do people get excited over the cash buyer?
In: Economics
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This is absolutely correct. I live in a notoriously progressive, but rich town, with older hippie types. They’re super liberal voters on all things except affordable housing or public transportation initiatives.
Nothing will change so long as they check Zillow every month.
Their offer has less contingencies- mostly, that they can’t back out because they didn’t obtain a loan.
My all cash buyer closed on the house in 2 weeks instead of a month. No inspections, appraisers, no making sure the bank wouldn’t lose their ass, no problems. The most difficult part was getting the cash to pay off _my_ mortgage
There is something in property called the chain. In general people don’t have the money for a property laying around, the way they buy one house is to sell another one. So if anything goes wrong with the sale of their house like a buyer pulling out then they won’t have the money to buy your house. Often there are a whole set of people each waiting for their house to be sold to buy the other one and these are lined up in what is called a chain, any break in the chain means that all the property deals can’t go through. However if one person is buying the house with cash that immediately stops the chain, because they aren’t dependant upon selling a house so their deal will go through.
“Cash” buyers are sought after mainly because they’re not selling their house in order to purchase a new one.
This can break a chain of buyers and sellers that have confirmed offers but cannot purchase the new house until their current house has been sold.
Once a “cash” buyer comes in then the whole chain of buyers and sellers can complete.
Buyer can offer 1,000,000,000,000,000 for your shitty house but if it doesn’t appraise then they’re not getting the loan and your house is back on the market and you just lost 2-3 months of potential time to sell your house. Cash is king
TX. Got a full cash offer on my house way higher than list price/market. If they financed they would NOT have been able to finance as the house wouldn’t have appraised at offer. So you avoid all that mess.
Given the amount of anti-money laundering checks that I had to go through to buy a house with a mortgage – proof of ID and full accounting of where the money for the deposit came from, I am surprised that you can purchase a house for cash.
This was something that crossed my mind a few days back, watching TV and someone came into a lot of money. I thought “if I went into an estate agent with that much money and said that I wanted to buy a house, would they even do that, and if they did how much AML paperwork would that create?”
Just wanted to vent that I’m in California right now as a buyer trying to buy a home in the 1.2m range and have lost all my offers to others with cash offers. On average my offer has been about 50k above asking price and as high as 100k. Who are all these people with a million dollars in cash that I’m losing to?!
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