Will I get a better price if I offer cash vs. a loan when purchasing a house?
That is the golden question I get often as a Real Estate professional. The truth in, sellers consider many things. Below I outline things that are important to home sellers when it comes to accepting offers in North Carolina.
Price - Price is the first thing sellers want to know. For some, this is everything. To be honest, mortgage money is just as green as cash. And, people getting a mortgage are less likely to walk away from a deal than someone paying cash.
Due Diligence - This is the non-refundable fee buyers pay up front to secure their offer. It is negotiable and can be any amount. Of course, it has to be acceptable to the seller or the offer will not get accepted. Over the years we've seen anything from zero dollars to the full purchase price. These days, zero dollars won't get you anywhere. The reason this is important is because the seller knows if you walk away, they keep this money and it helps pay for things such as that extra mortgage payment they had to make since they didn't close on time, moving deposits, or deficits from the next offer. It is always stressful when a buyer walks away and leaves a seller hanging. They'd rather have the deal go through than earn the due diligence fee. When that unfortunate situations happens where a buyer walks away, it at least helps make up for some of the cost and stress of the situation.
Due Diligence date - The shorter the better. These days, we often see no days for due diligence. In the past, we've seen up to 30 days. Fewer days gives a home seller the warm fuzzy feeling that a buyer is less likely to walk away.
Closing date - This is important to home sellers. They want a date that lines up with what is important in their lives.
Earnest money - We rarely see this these days. It is the money held in a trust. If a buyer walks away after their due diligence date, then this money also becomes non refundable and is retained by the seller.
No repairs - Home sellers love this. It means the transaction will have less stress. Selling a home is very stressful. Getting it ready to sell begins well before it hits the market. So going into an offer knowing you're not going to be asked to do repairs or nickel and dimed throughout the process, helps make it less stressful.
Appraisal addendum - This is the buyer's assurance that they'll pay the price they offered. The appraisal is for the lender. That means the buyer will cover the difference. If the buyers offer is the highest but they won't cover the difference, then it may not be the best offer.
Leaseback/seller possession - This can be very important to a home seller. Sometimes they want their kids to finish school, need time to get into their next house, or need time to find a house. This just makes the transition to their next house easier.
So where does CASH plan into the offer? Cash is good if you have the funds to cover an appraisal gap or if you're closing quickly. A seller doesn't have to worry about a deal falling through because you couldn't qualify. However, cash buyers can (not always) be more demanding or picky. So, a home seller and their agent will take all of this into consideration. Yes, CASH is good but it isn't the end all to be all.
There are other factors that can be important.
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