When Selling a Home, Does an All-Cash Offer Make a Difference?

If you’re selling a home in Yorba Linda, you’re likely to receive multiple offers — assuming you’ve set the listing price in accordance with current market values.

When you’re comparing the offers you receive, you will have to consider other factors besides the price, such as proposed closing dates, requests for closing cost assistance and the way each offeror proposes to pay for the purchase.

Most Southern California home buyers use a home loan for some portion of their purchase, but you may also receive some all-cash offers. In that case, should you give cash buyers preference over buyers who plan to finance their purchase?

All Offers Are Essentially Cash Offers When You’re Selling a Home

From the home seller’s perspective, all offers are essentially cash offers, whether those funds come from the buyer’s bank account or from a mortgage lender. 

Although a cash purchase reduces some transaction costs and fees for the buyer, it typically does not affect the home seller’s costs one way or the other.

All-Cash Offers Offer Some Potential Advantages

However, a cash offer could potentially provide some limited advantages over a financed purchase.

Cash buyers don’t have to wait for the loan approval process. So conceivably, they could close on the purchase more quickly than someone who needs financing. Cash buyers have the option of waiving the appraisal requirement and termite inspection (both required by most lenders). 

The most compelling advantage a cash buyer has is that they will never need to exercise the financing contingency clause. In other words, they cannot get out of the contract based on a lender turning down their application for a mortgage. This gives you, as the seller, a higher level of confidence that the potential buyer can complete the purchase.

Should You Push for a Cash Buyer when Selling Your Home?

Although no one answer is right for every seller, you likely have no reason to insist on an all-cash offer or to compromise on price or contract terms simply because a buyer plans to use cash to buy your home.

In today’s market, you should never consider a potential buyer’s offer unless they provide a full pre-approval from their mortgage lender. Although the lender won’t grant final approval until they have a full file — including an appraisal, title report and other property-specific documents — a pre-approval (as compared to a pre-qualification) is a strong indication that the potential buyer can successfully obtain financing.

The best way to evaluate the offers you receive on your home is to have an experienced Realtor® on your side. Your agent can help you consider the relative advantages of each offer you receive, so you can make an informed decision that best meets your goals.

In Yorba Linda and the surrounding communities of Southern California, the Edie Israel Team provides exceptional service and representation for buyers and sellers. Contact us today to learn more about how we can assist you through the complex process of selling a home.