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Lorri Fowler, Premier Real Estate Agent

WA Lic #103207 (206) 483-8040

Lorri Fowler, Premier Real Estate Agent


Pros & Cons of All Cash Offers for Home Purchases

(Published on - 7/29/2021 5:15:02 AM)
All-cash home purchases have become prevalent in today’s competitive market (a welcome trend for sellers). Since the funds are available immediately, all-cash buyers pose less financial risk, making them an attractive option in multiple-offer situations.
But all-cash offers come with a unique set of pros and cons for both buyers and sellers. If you’re dealing with an all-cash offer, here’s what you need to consider.
For Buyers
Offering cash eliminates the uncertainty and potential delays associated with mortgage approval. Appraisals and certain contingencies may not be necessary. As a result, the entire process can be streamlined and accelerated. Such benefits often inspire sellers to accept all-cash offers below the original listing price.
But there are downsides. All-cash buyers commit significant funds to one hard-to-move asset, and they’re ineligible for sizable mortgage-related tax deductions. But with no mortgage, #cash buyers will likely save thousands in interest.
Your all-cash buyers should:
Be prepared to provide "proof of funds" documentation from their financial institution.
Allocate all funds to one account to prevent transfer delays.
Set money aside for expenses such as #inspection, insurance, property #taxes, maintenance and repairs.
For Sellers
Cash offers often come from experienced investors in search of flip or #rental #properties. Such buyers often have an existing relationship with an #escrow and #title company and will usually cover closing costs. These buyers are also less likely to expect the #seller to make repairs.
Even if the #buyer isn’t an #investor, the process is more streamlined, with less paperwork and fewer delays and contingencies. Thus, purchases often close in half the time, allowing sellers to save on their mortgage and #housing expenses.
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