Guide To Cash Offers: Why They’re Preferred By Sellers
Today’s real estate market is the source of many headaches for both buyers and sellers. If you’re planning to sell your home, you’re likely searching for ways to get the most out of your sale—but this can be tricky. With fragile deals falling through and market prices fluctuating, you risk wasting time and money keeping your home on the market.
Luckily for sellers, increased competition among buyers has ushered in a new king: the cash offer. Just last year, about 30% of homes were sold to all-cash offers—and that number is growing steadily. Cash offers have pushed the real estate market in a new direction, and learning how to navigate this new cash-led world can help you get the most money for your home.
Read on to find out why cash offers are better for today’s sellers, and learn how you can get one for your home.
Cash Offers: What Do They Mean?
In a market as competitive as today’s, it’s common for a seller to receive multiple offers on their home. Usually, the majority of these offers will need to be financed with the help of a lender. Even if the buyer is pre-approved, these deals are heavily dependent on the lender and often fall through due to their assessment.
All-cash offers essentially remove this third party entirely. For a buyer to submit a cash offer, they must have enough liquid assets at their disposal to write a check for the full price of the home; eliminating their need for a lender. With the rise of cash offers in the real estate market today, more buyers are working to submit cash offers rather than going the traditional lending route.
Not only do cash offers eliminate the third party, but they also give buyers a competitive edge thanks to their popularity with sellers. For reasons that are discussed in detail below, cash offers are also greatly preferred by sellers.
Why Sellers Prefer Cash Offers
As the rate of all-cash offers rises dramatically, it begs the question: why do sellers like cash offers? There are a few reasons why this is the case. As a seller yourself, there are several benefits of cash offers you’ll have to look forward to. Read through the list below to learn more about them in greater detail.
Less Risk of the Deal Falling Through
Until the moment a buyer closes on a home, the entire sale is fraught with uncertainty. With traditional financing, buyers are completely at the mercy of their lender; the smallest change in a credit score can completely undermine a sale at the last second, forcing the home back onto the market. Apart from canceling a sale entirely, financing issues can also cause delays (around 21%, according to the National Association of Realtors), some of which can last for weeks or even months.
As a seller, you’ve invested time, energy, and money into listing your home and preparing it for sale, and you may even have time-sensitive relocation plans. A delayed or canceled deal can send you back to square one, which can be costly. When it comes to cash, the buyer either has it or they don’t. As long as the funds have been verified, there is very little chance that the deal will fall through. This increased confidence in the sale is one of the biggest reasons why sellers prefer cash offers.
No Stressing Over Appraisals Or Contingencies
With traditional financing, lenders will require the home to be appraised before the mortgage is approved. Since many homes are rapidly increasing in value due to market demand, there is often an “appraisal gap,” or a difference between what the buyer is willing to pay and what the lender will finance. With cash offers, there is no appraisal required, and the buyers are free to spend however much they deem appropriate.
When working through a lender, buyers may also be derailed by additional contingencies. Anything from getting a new job to becoming a victim of identity theft can violate a contingency that could completely cancel a sale. All-cash offers eliminate these potential roadblocks—as long as the buyer has enough cash, the sale is good to go.
Speeds Up the Process
The process of selling a home can be a long one. Even if the buyer is pre-approved, they still have to obtain the official mortgage approval. Then comes the underwriting process, which can sometimes take up to two months to complete. During this time, you not only have to assume the risk of the deal falling through but also continue to wait for money that may be essential to your relocation plans.
By accepting a cash offer, the time between negotiations and closing is minuscule. If the buyer has readily available proof of funds, closing a cash transaction can take as little as two weeks.
Simplifies Closing
In addition to speeding up the process of selling your home, cash offers drastically simplify it. For a cash transaction, the buyer is generally responsible for organizing their agent and a title and escrow company to ensure that the paperwork is in order. Compared to working with a lender, this method has much less to organize and sign off on—not to mention no contingencies to satisfy. Without having to work with a third party, you and the buyer are free to sign off on the deal without navigating any outside conditions.
The Types of Buyers Who Will Make a Cash Offer
While anyone with plenty of funds can pay cash for a house, there are a couple of categories that all-cash buyers tend to fall into. Knowing who you’re looking for can help you keep an eye out for buyers who may be capable of giving you a cash offer.
Buyers who are downsizing are likely to pay cash for their next home. This is largely due to the fact that the sale of a high-valued home often yields enough profit to purchase a smaller home without the need for a third-party lender. Buyers who have a generous supply of liquid assets are also more likely to submit a cash offer for a home.
Getting a Cash Offer For Your Home
Now that you know the benefits of accepting a cash offer for your home, you’re probably wondering how to get one. Luckily, you don’t have to wait around for a buyer with plenty of cash. Instead, there are some steps you can take to ensure you get the best offer for your home—and one that pays in cash. Read on below to find out what steps you need to take to secure an all-cash offer for your home.
Know Your Home’s Value
The first step in getting a cash offer for your home is to find its true value. This will allow you to list your home at a price that will net you the maximum profit. To get the most accurate evaluation of your home, it’s important to use the right appraisal tool.
The online home value assessment tool from iBuyer is the easiest and most accurate way to find the true value of your home. All you need to do is enter your address into the evaluation bar, and data from local and national real estate markets will combine to give you the most accurate assessment of your home with just the click of a button.
Find the Right Partner
While cash offers are rising in popularity, it can still be a challenge to get one for your home. That’s why it’s essential to find the right partner to help you get the offer you want.
When it comes to finding buyers who are willing to pay cash for their next home, there is no better partner than an iBuyer. With an iBuyer’s help, you’ll gain access to an exclusive pool of buyers who are willing to pay cash for your home without waiting weeks or months for an offer. And with the iValuation tool, you can be sure you’re getting a fair price for your home.
Get a Cash Offer Quick with iBuyer
Getting a cash offer for your home is easy and stress-free with iBuyer’s help. In just a few clicks, you can receive cash offers for your home—no open houses needed. And with the as-is guarantee, you can commit to selling your home without investing in costly repairs or upgrades.
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With iBuyer, you don’t have to settle for less than your home is worth. With access to both local and national data, you’ll get the most accurate evaluation of your home, plus access to buyers who are willing to pay for it. Find your home’s value and take the first step toward getting a cash offer today.
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