A cash offer is an offer from someone who has the full amount of funds for the offer available to pay for the home at this time. The funds are available, and not given by, or contingent upon, approval by a bank or lender.
We can’t say that cash offers are better in every circumstance. However, they can benefit either party and they can definitely be the better course of action.
The main benefits are ease of sale and quick access to funds for the seller. For the buyer, cash offers can be treated preferentially in multi-bid sales and you can get a home for less total cost than you may when using conventional funding.
If two offers are the same amount, but one is a cash offer and one is conventionally funded, sellers will likely go with the cash offer. Often, sellers will even work with $2000 to $3000 of a cash discount to go for a cash offer over a traditional offer. This is highly dependent on the seller, but we have seen that the $2000 to $3000 discount range emerge as a trending “sweet spot” for sellers. Sellers may still want to go with more money in the long run and can go with the lender-backed offer over a lower cash offer sometimes.
An offer and sale can go through in as fast as 3-5 business days depending on title insurance. Title companies are very busy right now, but cash offers still move quickly, especially in comparison to funded offers’ closing time.
If you work with 616 Realty on a cash offer on your home, someone from 616 Realty will come to the home, meet you, learn about you and your home, and provide you with a person you can communicate with, visit in a physical office, and someone you can ask questions about the process.
We can also let you know what you might expect the market value of your home to be if you decided to list it and take conventional offers on the home, with the marketing and listing expertise of 616 Realty working with you on the sale.
Zillow simply doesn’t provide the same level of personal service to you when making cash offers.
If you accept a cash offer on your home you can get a quick closing. You don’t have to worry about the buyer being pre-qualified or qualified for a loan. There are no worries about appraisals and fewer opportunities for financing hiccups.
It’s more likely you can sell the home as-is, without getting repairs or updates, and without scheduling showings, all things you may need to do to sell the home traditionally.
If you want ease or comfort of closing quickly, and to get the money in your pocket shortly after the sale, accepting cash offers may be the route to take.
You can liken accepting a cash offer on a home to trading in a car. You won’t get 100% of the value on your home when accepting a cash offer, typically it will be closer to 80% or 85% of the true value of your home.
There are many situations when this tradeoff may be beneficial. For estate sales or estate homes, accepting cash offers can make the home easier to sell. You won’t need to get the home ready for showings, or get an appraisal, or deal with the time-consuming factors that are needed to list and sell a home traditionally.
For any home in which the sale will be split multiple ways, or when increased time and travel would be needed to prepare and list a home, a cash offer may be attractive to sellers.
616 Realty works with sellers looking for a cash offer. When we come out to the home to see it, besides preparing a cash offer for the home, we can also let you know how much the home could be worth and the market value if 616 Realty were to help you market, list, and sell the home.
Sometimes the difference between a cash offer value and this prospective home value may be enough to consider listing the home traditionally and selling it to a buyer with bank financing. Sometimes, cash simply isn’t the best way to go.
- The ease of closing on the home with a cash buyer can be attractive to sellers.
- It’s easier to sell the home without appraisals and listings when you’re accepting cash offers.
Do you have a hard closing date requirement?
When buying with cash you have an advantage as you’re paying the seller cash. This can increase your chances of getting your offer accepted over financed offers. Also, when buying with cash, you don’t need to worry about interest on the cost of the home unless you’re using a line of equity for the cash offer.
When you’re not waiting on a bank, it’s a smoother, quicker transaction. That’s why cash offers are attractive to sellers. The only bank info you should need to provide is a proof of funds available to cover the cash offer. Your bank should be able to provide this easily - it can be a letter from the bank to the seller or even a screenshot of your bank statements or balance.
When making a cash offer, the first course of action is making sure you can provide the proof of funds necessary to make the offer you want to make.
We can help you negotiate your offer, especially if you are trying to negotiate in a multi-bid situation. If you are offering the same number in a cash offer as conventionally financed offers in a multi-offer sale, you’re likely going to win out since you’re paying with cash.
For homes getting multiple offers, you get some preference most of the time if you offer cash.
You don’t need an appraisal - but you can get one if you want to make an offer based on an appraisal.