Why do home sellers prefer a “cash” buyer? Wouldn’t they get the same amount of $ as a check from the bank if the buyer has a home loan?

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Why do home sellers prefer a “cash” buyer? Wouldn’t they get the same amount of $ as a check from the bank if the buyer has a home loan?

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36 Answers

Anonymous 0 Comments

Mostly time. Banks take forever and they could decide to not lend at the 11th hour. Cash means you get the money right away without any extra bullshit.

Anonymous 0 Comments

Someone able to pay an all cash offer makes it more likely that the deal will finalize because less things can go wrong, and the closing process will be faster. So if the offer prices are similar the all cash offer will usually win.

Anonymous 0 Comments

Financing has the possibility to fall through even if the buyer has pre-approval. A number of things could cause the approval to fall through at closing. Let’s say you were selling a house and the buyer bought a new car from when they were pre-approved and closing. Just before closing, their credit is pulled again (which is very common and required in some states) and the purchase of the new car causes their financing to be pulled at the last minute or force an interest rate that affects the monthly payment to a point where the buyer backs out b/c they can’t afford it.

For the seller, you loose the sell and have to start the process of returning back to the market to find another buyer… all while you are having to maintain the property.

Cash, on the other hand, avoids all of this and if you must sell then you want a sure thing vs taking the risk notes above.

Anonymous 0 Comments

Most points are already given above. Very little outs for the buyers. Much quicker closing. No bs like inspection etc /s no bank pencil pushers to deal with.

Anonymous 0 Comments

“Here is $300k, thx for the house”

vs

“My bank will probably lend me the money, we’ll have to fill out lots of paperwork to satisfy the lender, dozens of things could go sideways”

Easy choice ..

Anonymous 0 Comments

Being able to pay cash is preferable for many large transactions because it’s guaranteed. If someone has cash on hand it’s pretty much a sure thing the deal will be able to go through. In addition, it tends to be faster to hand someone cash than to wait for a bank.

Anonymous 0 Comments

If you’re selling a TV, would you rather have A) someone walk up with $100 and take the TV or B) someone say their bank will give you $100 next week after the TV gets appraised, but only if it’s appraised for the full $100 and after they sell their old TV?

Obviously that’s an extreme example, but cash offers are often faster and have less contingencies.

When selling my house, I had eight offers ranging from $250,000 to $270,000. I took $264,000 cash. Why? I had the money in my account in three days and the sale was done. Would $270,000 have been better? Maybe, but what if the home inspection went bad, or the buyers didn’t sell their house, or the appraisal was less than asking price? All those factored in, so I took cash for ease and a quick sale.

Anonymous 0 Comments

Cash buyers can close the sale faster and the sellers will get their money faster.

Most people when they buy a house use a standard contract from the Realtor. In this contract there is a provision that says something like “subject to buyer securing a loan for the purchase of the house.” the language can be quite different but the idea is, if the buyer fails to secure the loan, for any reason, they can get out of buying the house.

Now they may lose the escrow money but that’s often WAY less than the price of the house.

So a buyer can hold a house for many weeks (sometimes 6 or more weeks) under contract and fail to secure a loan for it’s purchase. During that time the sellers are unable to move on with their lives.

Also most sellers are moving to a new house and part of that deal is for them to sell their old house. So they close on the sale of their old house and sometimes, the same day, the close on the purchase of their new house. If the buyer doesn’t qualify, both deals may fall apart.

Cash buyers eliminate all that.

Anonymous 0 Comments

After the home inspection by a certified inspector, many issues can arise. The bank may not be willing to loan “X” amount of money on a particular house, even though you felt the price was acceptable…

And even if the bank is willing, the potential buyer may suddenly realize the house they liked has serious issues that they don’t want to deal with.

A “cash” buyer does not need approval from a bank. For some reason, they are willing to pay a little more than what the typical house in that neighborhood is selling for at the time. Maybe they are in a hurry and are willing to pay $10K extra to smooth things out. Cash is cash…

Anonymous 0 Comments

When people offer to pay with cash, it’s more certain that the deal will go through at the end of closing than an offer contingent on bank approval.