If you’ve been looking at selling your home, you’ve likely come across the term “all-cash offer”.
You’ve also probably seen it referenced very positively. In the real estate world, an all-cash offer is often the best offer you can receive.
However, you might be wondering why is an all-cash offer better than the others?
If someone offers me $300,000 for my home, cash, versus someone offering me $300,000 with financing, does it really matter which one of the offers I pick?
It depends.
Getting an all-cash offer is often better than all the other offers, but not always.
To understand why all-cash offers are king, especially in the Birmingham, AL, market, we need to understand a little more about the offer process.
What Is an All-Cash Offer?
When someone is talking about an all-cash offer, they mean that the transaction requires no financing. That is, the person or company making the offer has full access to the funds necessary to buy the home.
By contrast, other offers require financing.
For example:
Someone might offer to buy your home but make it contingent upon them obtaining the funds to purchase it.
Usually, this financing is with a mortgage at a bank, although other ways people (investors, mainly) can finance home purchases include opening a HELOC or raising capital (if they are a business).
Why Is an All-Cash Offer Better?
Of course, the next question is, why is an all-cash offer better? Why would someone purposefully pick an all-cash offer over another one?
The main reason is quite simple: Certainty.
With an all-cash offer, you can be 100% sure that the transaction will complete.
The buyer has all the funds waiting in a bank account, and the moment you accept the offer, they can open escrow and wire the funds to it.
By contrast, with an offer that relies on financing, there’s much more uncertainty. A bank will require an appraisal and a home inspection.
If either of those has problems, the bank won’t fund the loan. It’s not uncommon for someone to put in an offer for a home, only to find out later that the appraisal came back lower than the offer. When that happens, if the buyer doesn’t have the funds to cover the difference, the transaction falls apart.
However, there is another reason why all-cash offers are indeed the best. Cash offers can close the fastest! Getting a loan takes time.
For the average person looking to get a mortgage, the entire process, from offer to final funding, typically takes between 30 and 45 days. That’s up to a month and a half of waiting!
In that time, plenty can happen to your home. A water pipe can break, and the buyer won’t take possession of the house because of it.
Additionally, life can change for the buyer. The buyer could get a job in a different state or go through a divorce. While not necessarily likely, such scenarios are also not impossible. And each one will completely derail the offer process.
All-cash offers are indeed the best ones you can get in the real estate world!
How Can I Get an All-Cash Offer?
Getting an all-cash offer through traditional real estate channels requires more luck than skill. In Birmingham, all-cash offers tend to be a little more prevalent, thanks to lower housing costs.
However, even in Birmingham, data shows that only about 36% of deals were all-cash.
Note: There is one way to ensure that you get an all-cash offer. That way is to sell to an investor. Cash investors, like Cash Home Offer USA, can buy your home all-cash. Our team of experts can assess your home and provide you with an all-cash offer that can close in as little as seven days. These investors will happily buy houses in Birmingham, AL!
By selling to a company that specializes in all-cash offers, you’ll have two primary benefits.
- You won’t have to worry about whether or not the offer to buy your home will close. You can be 100% sure that, on the closing date, you’ll have the money in your account.
- You can avoid real estate commissions altogether. Most real estate agents charge somewhere between 2.5%-3% in fees. You’ll pay this fee twice, once to your agent as the seller and once to the buyer’s agent. On a $200,000 home, you could be looking at anywhere between $5,000-$6,000 lost in commissions. With a cash investor, you won’t pay any of those fees. There are no real estate agents involved in the transaction as cash buyers write their offers without an agent’s help. That means more money in your pocket!
Should I Take the Cash Offer?
As you can see, an all-cash offer is the best type of offer you can get on your house.
The only question remaining is: should you take it? Or, put another way, should you choose an all-cash offer over another offer type?
The answer to that is almost always yes.
Unless the offer is significantly less than what someone provides with a mortgage, a cash offer is almost certainly the way to go.
- You’ll get the certainty that you will sell your home while avoiding some of the common pitfalls that accompany non-cash offers.
- You won’t have to worry about the house not appraising for the purchase price
- You’ll be able to close in a matter of days instead of weeks or even months.
If you’re interested in getting an all-cash offer for your home, please contact us.
We would love to learn more about your Birmingham home and give you a fair, cash offer for it.
We buy houses no matter the condition. Whether your home needs repairs, it’s untidy, or you’re in the process of foreclosure – none of that matters. We’re interested in writing a custom all-cash offer for you! Now that you know why is an all-cash offer better, we’ll be happy to write you one!