Seller's Guide: Cash Offers Not All the Same

Seller's Guide: Cash Offers Not All the Same

Copyright (c) 2011, Deanna & Jim's GOLD Team

     Homeowners, or those evaluating proposed terms of sale for short sales, have often heard that all 

cash offers are the best.

     While it is true that a cash offer may offer many advantages there are many details which need to be 

verified:

(1) The purchaser needs to provide proof of funds - a letter on bank letterhead from an officer of the bank or an account statement showing the funds on deposit.  (A letter from Great Northern Flash Money saying that the buyer has access to a line of credit sufficient to buy the home means that they are BORROWING the money from a hard money or flash money lender. Such a letter requires investigation of both the source of funds and the terms of its availability by the listing agent.)

(2) Some cash offers remove all contingencies:

o Home Inspection

o Radon Inspection

o Conformity with local zoning/municipal codes

o Termite inspection

A cash buyer has the right to purchae without requiring any of these inspections or conformities. Some cash buyers write ultra-clean offers. Others offer cash but are contingent on various inspections.

(3) Some cash offers are contingent on appraisal. This is because the buyer wants to make sure they are not overpaying for the house. We have seen cash buyers use the strategy of making a cash offer well over market value with an appraisal contingency.  What this does is clears the field of competing offers then depends on the appraisal to cut the price back to market value.  Sellers need to be wary of this tactic.

As always the smart seller uses an experienced local agent with deep credentials and plenty of negotiating experience.

(Deanna and Jim's GOLD Team has handled over 500 northern Virginia residential real estate transactions in the last 10 years. We have Certified Distressed Property Expert, MBA, MSE, MA, and Associate Broker  credentials and a mediator trained to the standards of the Virginia Supreme Court in negotiation and mediation of civil matters.)