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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Realtor who reps the largest cash buyers in the US here:
The main difference is that the money coming from a bank comes with many strings attached. The property has to appraise at the value of the offer otherwise the amount written on the offer price line doesn’t mean shit! The large professional firms will require a buyer to post an appraisal gap to cover the difference in the case the property doesn’t appraise (bear in mind appraisals can vary by person performing it and given the speed of the market today, many appraisers regularly improperly capture that speed and appraisals come in low or high vs true market value).
The benefit of a cash offer is that the end result is basically spelled out for you up front, you KNOW exactly what the final price is up front.
The catch is that you need to get a verifiable Proof of Funds up front on cash deals. There are a ton of wholesalers out there who will get you under contract but not actually have the funds or buyer to assign the deal to up front, then waste your time when they can’t perform. One thing you can do to avoid that is require larger Earnest Money and have the buyer tighten up their Due Diligence (inspection) period. Research your buyer when you receive an offer and you’ll be amazed at what you find!
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