What is a Cash Offer in Real Estate and Why Consider it?

Home is the place where people build a family, make memories in it, and make themselves feel safe and secure. That is why the real estate market is considered as one of the hot and active markets of all time. Because of its ramping up sales, homebuyers do not miss any single opportunity to buy a property as soon as it is listed. And for them to get the house they want, they won’t offer any type of mortgage or borrowing. Instead, they will make an all-cash offer to quickly close the deal. But what is a cash offer?

Cash offer in a Real Estate market is acquiring a house, or any other property without the need of mortgage or any other borrowings. The full amount of the house listed will be paid with cash, which opposes the purpose of banks and lenders. Nowadays, home buyers who desperately want a particular house make cash offers just for them to avoid other home buyers to compete with them, and acquire the house as fast as possible. On the other hand, cash offers are also being done by House Flippers or real estate investors, who buy any house they can see, fix, upgrade and redesign it, and sell it to a much larger price to gain profit.

Unlike sales with the involvement of mortgage and other borrowings, cash offer is a seller-buyer transaction that requires less time and effort. However, it is still a sale of a high-cost property, which means it is not just a simple shake of hands and you’ll get what you need. It is indeed faster and easier than those with banks and mortgages involved, but you still have work to do especially when you are the seller.

Seller must assure that the house he/she sells is in good condition, have given enough description in the listing about its issues, and must have certifications, approvals from the government, and any other legal documentations and registrations that homes must have. It is important that sellers already processed the house's title documents, unpaid property and special assessment taxes, and other formal and legal documentation in the transferring of rights of the property. This might be time and cash-consuming, but sellers can always include those expenses to the house’s price.

With regards to the buyer, it is crucial for them to know how to make a cash offer. First, buyers must assure that they are capable of paying not just the price presented on the listing, but also for taxes and other expenses. Legal works are always costly, together with the property insurance, taxes, transferring of rights fees, and other home-related costs. That is why buying a house through a cash offer also requires proper budgeting. Also, it is not enough to only have a budget for other expenses, buyers must also assure the seller that they are capable of paying the property and any related expenses by proving your financial capabilities. Enlighten them on what you have, and what you can afford. In that way, the seller will not doubt your financial ability, and will process all the necessary actions for your home. Lastly, seek help from a professional, especially if you are a new home seller. It is important to have a Real Estate Agent for they know if the property is worth its price, and if you are transacting with a reliable seller. Seeking professional help will cost some of your money, but it will definitely help you to have a safe and smooth transaction.

Buying a home or selling your house for a cash offer eliminates hassle and time-consuming processes, which is the best option for most people. But before making a cash offer deal, be sure that you are financially capable, and the transaction will not affect your other financial goals and obligations. Always anticipate your future potential expenses, obligations, and take your time planning, managing and thinking if you are really prepared to buy a house. Read more...