In a competitive market, paying cash could help you outperform other homebuyers. Sellers tend to prefer cash offers because those deals close faster. Byron Ford, an agent in New Bedford, Massachusetts, works with 76% more single-family homes than other agents in his area. As a seller, you should weigh the importance of an earlier closing date against cash sales that can mean taking your home out of your hands faster than selling it to a homebuyer who needs to apply for a home loan.
However, in some cases, accepting a cash offer may result in a lower purchase price or lower closing costs. If you're buying a home, a cash purchase can take as little as a few weeks. As soon as the contract is signed and the title is clear, you are ready. As a conservative estimate, you'll still want to plan for the close of about a month.
Paying in cash is also often more attractive to sellers. In a competitive market, a seller is likely to accept a cash offer rather than other offers because they don't have to worry about a buyer pulling out due to being denied financing, says Peter Grabel, managing director of MLO Luxury Mortgage Corp. A cash home purchase also has the flexibility to close faster (if desired) than one related to loans, which could be attractive to a seller. A cash offer is a cash offer, which means that a homebuyer wants to buy the property without a mortgage loan or other type of financing.
These offers tend to be more attractive to sellers, as they mean there is no risk of falling funding from the buyer and, generally, a faster closing time. If you're selling your home (or even just considering doing so), a cash offer can sound quite tempting. After all, the closing process is usually faster and there is no risk of buyer financing falling. Smart partner agents can help you buy your dream home for cash and make sure the process goes smoothly.
You will qualify for a much larger loan when you buy a home with cash, since your equity in the property is high. We'll go into the details below, but for now, just know that paying cash avoids mortgage registration tax when you buy a home or condo.