Home, Land, Property Buying and Selling - Offer Cash vs Financing
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sam9009
12-15-07, 10:54 PM
Okay here are some dumb questions. Why is it that if you buy a home and you don't need a mortgage,-meaning you can pay the whole amount without the need of financing-that type of offer is more attractive to a seller? Doesn't the seller receive the whole amount regardless if you need financing or not? For example I see a home and I decide to buy for whatever amount and I get a loan. So the bank gives me the loan and then I use that loan to pay the seller the full amount right. Why would the seller be more inclined to accept on all cash offer, rather than a offer that's coming from someone that will be getting financing. The seller will get his full amount regardless right?
Thanks in advance.
Thanks in advance.
Mark_MS
12-16-07, 07:52 AM
Yes the seller would get the "same" amount regardless of cash or financing buyer.
The only thing I can think of for a cash transaction is a quicker closing for the seller and quicker access to monies.
Mark_ms
The only thing I can think of for a cash transaction is a quicker closing for the seller and quicker access to monies.
Mark_ms
joed
12-16-07, 07:54 AM
Many offers are conditional on funding being approved. Cash offer not depend on bank approving. It would be a sure thing.
slumlordfrank
12-16-07, 11:55 AM
Well sam I've been buying for strictly CASH for more than 15 years now and I can tell you it has its benefits. There are two factors in any transaction; price and terms. Of course the seller will (maybe, eventually) get his price at closing.
But when you write an offer for cash you can ask for a quick closing, I typically offer to close in ONE WEEK.
When you offer cash you eliminate any (begging on your part) mention of a "financing contingency". The seller knows the deal is going to close.
The costs are less with cash than with financing, no points, no junk fees, no "warehousing" fees, fewer documents for the attorneys to prepare.
We just purchased a second/vacaction home, we offered 18% less than the seller was asking, 1 week closing, no inspection (we had the inspection report from when they had purchased the house 12 months earlier). Actually as a % of asking price that was a bit higher than I normally offer.
Sometimes it's the terms, not the price.
frank
But when you write an offer for cash you can ask for a quick closing, I typically offer to close in ONE WEEK.
When you offer cash you eliminate any (begging on your part) mention of a "financing contingency". The seller knows the deal is going to close.
The costs are less with cash than with financing, no points, no junk fees, no "warehousing" fees, fewer documents for the attorneys to prepare.
We just purchased a second/vacaction home, we offered 18% less than the seller was asking, 1 week closing, no inspection (we had the inspection report from when they had purchased the house 12 months earlier). Actually as a % of asking price that was a bit higher than I normally offer.
Sometimes it's the terms, not the price.
frank