Exactly what’s classified as a cash offer on a house?
Amidst a world of credit cards and electronic currency, you may ask yourself this question. Essentially, a cash offer creates a direct line of negotiation between you and the buyer. Specifically, a buyer who comes in with a cash offer is not reliant on a mortgage to buy your home. Thus, neither of you is dependent on the approval of a bank. This can foster easy communication and increase the chance that the sale closes successfully. A cash offer can make selling your house a seamless process. Furthermore, a cash offer can make the process quick and free of excessive conditions. For example, some buyers can make a cash offer in as little as 24 hours.
Does a cash offer literally mean cash?
No, receiving a cash offer does not necessarily mean a buyer rolling up to your house with a briefcase full of cash. It does mean, however, that the individual has the money readily available. Of course, many of us can’t afford to buy a house with all of the money up-front. Thus, the majority rely on a mortgage from the bank to purchase a home. In 2018, it was estimated that approximately 78% of home buyers had mortgages. While mortgages give many of us the opportunity to get a home when we would otherwise be unable to, mortgages can also slow the selling/purchasing process down. This makes sense because the bank has its own financial interests to look after. Therefore, a buyer who needs a mortgage has to rely on the approval of the bank.