Is cash king when buying a house in Raleigh NC?

By
Real Estate Agent with Keller Williams Preferred Realty

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. 

Posted by

Raleigh Cary Apex Realtor Carla Freund Realty

Presented by:

Carla Freund of Ask Realtor Carla

Carla Freund Realty Team

Keller Williams Preferred Realty

By Carla Freund Realty Team

Original Home of "Market In A Minute" Real Estate Report for Raleigh Cary CH & Durham Triangle

Carolina Life Real Estate and Relocation

 

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Comments (9)

Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Carla  and great information for people to know about.  Make it a great day!

 

Jun 22, 2022 07:41 AM
Carla Freund

Thank you Will! You have a great day as well.

Jun 23, 2022 08:48 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Carla, we are seeing many cash transactions, and lots less chance of a deal crashing.

Jun 22, 2022 08:14 AM
Carla Freund

We're seeing more cash transactions as well.

Jun 23, 2022 08:48 AM
Roy Kelley
Retired - Gaithersburg, MD

This is very good information to share with prospective home sellers and home buyers.

Jun 22, 2022 08:23 AM
Carla Freund

Thank you Roy. Have a great day!

Jun 23, 2022 08:48 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Carla,

We have been seeing lots of cash transactions (some with Homeward and Homelight) but many transactions are with 50% down which usually eliminates an appraisal. If the terms are better than the cash offer sellers will take the one with more favorable terms and higher price.

Jun 22, 2022 09:19 AM
Carla Freund

Same here Dorie! I feel like we're seeing more cash offers too.

Jun 23, 2022 08:47 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Carla very educational post, here in Beverly Hills when some one gives you proof of funds and it is all cash and the price points are well let's just say not middle class you know the deal will close do not have to worry about the Bank or the Bank's Appraisal...Endre

Jun 22, 2022 11:32 PM
Carla Freund

Most of the time they close here too. However, it seems someone paying cash will walk away from $10k-$20k while someone getting a loan would not. 

Jun 23, 2022 08:47 AM
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Carla Freund - I am also seeing a lot more cash buyers for homes than in past years from actual buyers as opposed to investors. Receiving proof of funds, includes cash or pre-approval letters is what I need either way. So many people are moving to TX from CA paying cash. Your blog post is very informative and educational. You were very detailed in your explanations. I liked that very much. And I wish you success always. 

Jun 24, 2022 05:43 AM
Carla Freund

Thank you Patricia! We're seeing more cash buyers as well. Some are investors and some are not. Baby boomers and Gen X are some we're seeing buy with cash. I have a few that are getting very small mortgages as well.

Jun 25, 2022 06:30 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Carla, with our market softening now, the cash buyers are feeling like they could offer less than the financed and still win the bid.

Jun 26, 2022 07:24 AM
Carla Freund

They're usually pretty savvy. 

Jun 27, 2022 05:13 AM
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo and Home Specialists

It's not the end all Carla, however Cash is usually King on most transactions that we have been involved in.

Jun 26, 2022 07:57 AM
Carla Freund

There is a sense of peace you get when the buyer is using cash to purchase.

Jun 27, 2022 05:14 AM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great information.   Thanks for sharing and enjoy your day!

Jul 01, 2022 07:34 AM
Carla Freund

Thank you so much Kristin! You as well!

Jul 02, 2022 06:44 AM