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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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.
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.
“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 ..
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.
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.
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.
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