What is a real Estate Cash Offer and Why Contemplate it?

What is a real Estate Cash Offer


If you are looking for options to sell your house and weighing possibilities to carry out the procedure promptly and smoothly then you must have gauged the pros and cons of the traditional selling process as well as heard of a cash offer. Here we will introduce you to what basically a real estate cash offer is and why you should seriously contemplate it.

What is a real estate cash offer on a house?

A real estate cash offer in return for a listed house or a property is an offer to the seller from a buyer. The buyer offers the seller a cash bid or readily available cash which refers to the fact that a home buyer is willing to buy the house without relying on a bank loan, mortgage offer, or other financing offers. These offers are usually more appealing to sellers as they are offered with prompt cash delivery and deal closing as the sellers do not have to wait for the approval for financing options of buyers. Whereas in traditional selling, the seller can be at risk of losing the potential buyer if the buyer faces a financing fall through. 

So, if you have received some serious cash offers on your house and people are ready to buy your house then you are lucky enough to not go through the traditional buying process. 

How a Purchasing Process Becomes Easier for a Buyer with a Cash Offer?

The buying and selling process differs greatly from the traditional process when it comes to cash offers. The varying nature of the process of cash offer is because of the not involvement of third-party financing or mortgage. As there is no third-party financing or mortgage, the process generally becomes prompt and rapid. Moreover, there is no underwriting, no documentation, and no need for appraisals needed for the buyers. Being a buyer there would still be a few documentation requirements like sorting out the insurance and title policy, providing the funding proofs, and undersigning all the closing documentation but still after this much documentation the time required for closing the deal is far less than the traditional buying option. In a cash offer, you may require or be able to close a deal in as less than as two to three weeks. Here are a few of the reasons and the variations in process of the cash offers for which you should consider this process. 

1. Eventualities: There are generally fewer or fewer risks or contingencies that can be faced by a buyer or a seller with cash sales. If we look at it from a buyer’s perspective, the buyer does not need to find financing companies and mortgage loans. Moreover, they also do not face sale contingency which means the buyer does not have to wait for the seller to buy another home for purchasing the current home of the seller. The market is open to buyers. Hence, many of the eventualities can be avoided with a cash sale.

2. Evaluations/ Appraisals: Appraisals or evaluations are characteristically lender-mandated, so without a creditor, a buyer generally will not have to be worried about them. There can be some specific cases in which a buyer may want an appraisal. Generally, appraisals are not part of a cash sales offer but if the buyers are investors looking for guaranteed returns, then they may request appraisals. 

3. Deal Closings: Cash sales make the closing much simpler as compared to traditional selling. Being a buyer, you just have to sign the title, settlement, and deed. The documentation process is generally small, afterwards, you just have to hand over the cheque or money draft to the concerned person and receive the keys to your newly owned house. Hence, the process is greatly shortened and no hidden costs are attached as there are no extra commissions or lender fees associated with the process. 

4. Escrow and Title: In the cash sales process, being a buyer, a title and escrow company is still needed to hold and handle the transactional process for you. But again, with cash sales, you have leverage in choosing these companies by comparing their fees and facilities. 

5. Proving the Financial Capability: With cash sales, another major variance is that being a buyer you have to provide proof of your financial capability. In traditional sales where a buyer is availing mortgage or bank loans, the lender is basically pre-approving and providing the proof of finances for the buyers but in cash sales, the buyer himself is responsible for providing the proof of funds in the form of a letter, a contract or a stamp paper from their banks which shows that they have enough funds available to support the purchase they are going to make.

Cash Offer Contemplations if you’re Purchasing a House

So, considering all the above-mentioned facts should you contemplate a cash offer and put your house up for a cash sale? Since then, we have looked for the benefits and edges cash sales provide. Let’s now have a look at some other pros and cons of cash bids and consider how they can be risky too and at the same time provide you benefits.  

Following are some other benefits of cash offers that you need to keep in mind while making your choice.

Pros of Offering a Cash Bid to a Seller

·   They make the seller confident in terms of accepting the offer of a buyer according to their conditions and a buyer and a seller can make a deal according to their terms and conditions.

·   As the terms and conditions are to be decided between the two parties only and there is no third party involved so the deal is often rapidly closed and decided upon, making the whole process quick and easygoing.

·        Your net worth or credit score does not matter while making the deal, all that matters is that you should have enough money to make the payment and close the deal successfully.

·        No home appraisals are required and no lengthy evaluation processes are needed.

·        You can save a lot of money in the long run as you have your own money to pay so no interest money is there to drain your resources over a long period of time. Hence money saving is one of the biggest advantages of cash-buying options.

·        No tardy documentation and paperwork is required in this process.

Cons of Offering a Cash Bid to a Seller

·        For you to make a cash offer, there is a huge amount of money that is required and for that, you may need to save for years if you need to buy a house without interest money or bank loans.

·        It requires a huge amount of money so you will be tying up all your savings in one asset may be and it may bind your liquidity.  

·        After being a cash buyer of a house, you may not be able to use mortgage-related tax deductions.

Another factor that determines a cash offer of your house is the market competitiveness i.e. if the market is engaging and there are a lot of buyers but you come up with a cash offer. It is the cash that makes you stand out and it helps you get your dream house.

Moreover, don’t consider all of your cash while making the offer. Aldo keeps in mind the side expenses like earnest money, homeowners’ insurance, moving expenses, and other dues like maintenance, etc without spending all of your savings

Considering Cash Offer as a Seller

Being a seller, you will also come across both kinds of offers a traditional offer and a cash offer too. Sellers also need to keep some pros and cons of Cash Offers while selling their properties. Here are some advantages and disadvantages of cash bids.

Pros of Accepting a Cash Bid:

·        Cash bid is risk averse to fall-through of buyer financing because a buyer is offering you cash that is readily available and he is not opting for third-party financing.

·        The deal closing is much more prompt as compared to the traditional selling process

·        There won’t be any typical home appraisals and evaluations and sellers remain easy while selling their homes

Cons of Accepting a Cash Bid:

·        As a Cash offer does not facilitate home evaluations and repairs and supports ‘as-is’ selling of the house so the prices offered in the cash offer might be lower than the traditional sale. But then again considering the fact that there are no repairs from a seller’s pocket, the trade-off is good to make.

·        The buyer typically isn’t scrutinized as thoroughly as in the traditional process


So, whether you are in a seller role or a buyer role, it is important to comprehend the pros and cons of both of the processes of selling your property to make this much important decision of your life, i.e., selling your house that you may have made through the savings of your lifetime. 

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

Get Your Free Offer Today!

We buy houses in any condition. No realtors, no commission, no repairs, get a top offer today! See how much we offer for your house in cash!
  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published. Required fields are marked *