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
After an offer contract is signed for a house, the buyer and seller goes into an escrow period before the deal closes. If a buyer is getting a mortgage to pay for the house, they have to provide the proper paperwork to get the loan and have it approved in the escrow period. If this fails, the seller has lost time dealing with this buyer and has to put the house back on the market. The seller does get the earnest money that the buyer puts down in cash to start the offer contract but you can’t get that time back especially if the housing market changes.
For a cash offer, the buyer can directly transfer the money instead of going through a mortgage lender. There is less risk of any issues for finance portion of the housing purchase.
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