by Andrea Storm
on Tuesday, August 20th, 2013 at 11:06am.
Cash is king or is it really? The majority of my buyers have been all cash lately. Do they really have the advantage over an offer that is financed? Not necessarily. Many sellers have been more inclined to accept a higher offer that is financed over a lower offer that is all cash. Sellers now are deciding that it might be worth the risk in taking a higher financed offer because it comes to them all cash in the end anyways.. I know many cash buyers would tend to disagree with this, but I have found this to be true in many circumstances.
Buyers that are pre-approved with a lender prior to writing an offer have already gone through the hoops of what the under writers are needing to get final bank approval. Meaning they are already well qualified and the odds of a sale fail due to financing would be pretty minimal.
Many buyers that are all cash with all the funds in the bank are wanting to find the best deal possible deal (which is true with all buyers) but especially with all cash buyers. So when they go to write an offer it usually is less than the asking price. The advantage to a seller with an all cash offer is that there is no financing contingency and the closing date is shorter. So if the house is sitting vacant and the seller has another mortgage on another property then a short closing date would be more favorable to the seller.
In short, cash might not look that great to a seller if the price doesn’t meet the bottom-line. It might be worth their time to get more money and wait longer on the closing than a lower price cash offer.