Cash Offer?

Nationally, some 30% of all home sales are for cash – indicating a large number of investors are still buying.

Cash buyers believe that a cash offer should entitle them to a lower price, and indeed that is the case in certain circumstances.

If a seller has time constraints, a cash offer is worth exchanging for money because something like 50% of all short-sale escrows never go to a close of escrow. Lenders are VERY careful, perhaps overly careful and they will use anything that upsets their initial calculation of worthiness to cancel the deal.

In good markets, buyers often take the initial approval of a loan as an opportunity to rush out and buy a new car, a purchase that diminishes their credit and often cancels the loan before it is made when, in the final 72 hours, the lender does a credit update.

These days, loans are so carefully made that placing a washing machine on your credit will give a lender the opportunity to cancel a loan, and believe me they are just looking for an opportunity!

Cash offers have two advantages: They offer the opportunity to close and escrow in days, not months, and they solve the credit worthiness problem.

So, if you get a cash offer it may well be worth reducing your final expectations for a price rather than facing the very likely cancelation of an escrow and having to keep your home listed in this relatively cold market.

In effect, you trade money for time – but then that is what almost all economic transactions are about.


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