In an environment where lots of loan providers are becoming more stringent, there has been an increase in the number of cash buyers looking to invest in real estate. Whether the purchase is made directly by cash or using a mortgage, the dealer gets the same sum of cash (though not always).
So why do people view a cash deal usually seen as more appealing than an offer to buy using a mortgage? The answer lies in the three items most sellers need from any transaction (besides a fair price); a speedy sale and the capability to move on. This combination is what gives money buyers an advantage in procuring their pick of property over those who must seek outside funding.
Cash buyers have everything they will need to proceed with the trade; they are just seeking a suitable e home and a ready buyer to generate an offer. For everybody else that wants to borrow to get into the property market, it isn’t quite that easy. Yes, they can make offers, but they’re not backed by anything concrete until approval for a loan.
In the case of those searching outside funds, an offer is much more of a goal than an immediate request to buy the property as soon as possible. Cash buyers have this power, and it allows them to give the seller a concrete deal to mull over nearly immediately.
The Certainty of Closing.
Offers based on the contingency which financing is available are reliant on external sources. If they’re not approved to get a loan, then the purchase cannot proceed. Conversely, cash buyers hold the entire world in their own hands and therefore are entirely in control of their very own proprietary fate. Sellers know that an offer of cash is much more of a sure thing than the offer to buy with a mortgage.
This certainty is so attractive to some sellers they are even ready to take significantly less than their asking price, to be sure the sale will proceed. Bringing in a finance company into the combination can make the deal collapse at any time, cash does not have this issue.
The Flexibility to Proceed.
A deal that can fall apart the moment either party chooses to back out of this bargain brings in the flexibility to move on whenever possible. No dealer would like to go through a long, protracted sale procedure, and money buyers are a sure way to avoid this. Cash buyers allow sellers to move on with their lives, which often leaves them a more attractive prospect than one who must wait for financing.
If you can purchase your next property with cash, you now know why that gives you the upper hand.