What Is A Cash Offer?
Wondering what is the cash offer definition?
Well, the cash offer definition is pretty much what it says, an offer made in cash.
But aren’t all offers cash? No one buys a house giving cows in return for the property…
Actually, you’d be surprised how many people do exactly just that. Cattle is valuable. Plus, in the end, it’s also money. What the cash offer definition really means is that the home buyer will seek no financing (mortgage) in order to pay for the house. The money is coming straight out of his or her pocket and going to the home seller. Just like as if you were buying something in the supermarket; a simple cash for merchandise transaction.
So, a cash offer is something that is interesting for home sellers because it speeds up the closing process by a lot. When the home buyer does it through a mortgage process, it will take weeks from the home buyer saying “I do” to the money arriving in the home seller’s account. And it might happen that the home buyer doesn’t get approved so it’s back to square one. Cash offers can be done in 3 days.
With all of that, for the home buyer, a cash offer can be a necessary measure to beat the competition. And you know what? It’s also good to know that you won’t put your house as real estate collateral.
But the reality is that cash flow is always important, so the real reason why home buyers do cash offers is only one: to bargain a better price. It’s seducing for Home Sellers to receive at once all that money and finish the angst that is the home selling process. What if the next person that makes an offer on the house starts to bother with real estate contingencies related to a new and lengthy home inspection as a way to lower the price anyway? Worse: what if no one else makes an offer on the house? Better to close it for a little less, right? Cash offer is money in the pocket for the home seller and a chance for the home buyer with funds to make the investment even better.
Real Estate Advice:
Read our article that goes deep into the question of buying a house with cash vs. mortgage to figure out which is better suited for you. If still in doubt, contact one of our real estate agents to consult!
Popular Real Estate Questions
Popular Real Estate Glossary Terms
Through the homestead exemption definition, we understand the legal instrument that provides physical and financial shelter in dire situations. The homestead exemption legal provision can ...
Flaw in an otherwise proper title. A title obtained through error or fraud without proper signature or consideration or other improper action. A defective title is null and void having no ...
The ability to pay is a self-explanatory term used in Real Estate to determine if the Home Buyer has the financial health to honor a deal. Mortgage Lenders can't afford to lend out money ...
When we look at title policies, there are different types of coverages offered by title companies. Figuring out which one is the best option in your particular situation often depends on ...
Also called the Rule of the Sum of the Digits. An approach that bank use to formulate a loan amortization schedule. It results in a borrower paying more interest in the beginning of a ...
Also called trust deed. A document that conveys title to a neutral third party during the period in which the mortgage loan is outstanding as collateral for a debt. ...
Rental based on a percent of sales or profit that in addition to the constant rental amount. ...
Some plausible, but not completely clear-cut indication of ownership rights. It supplements a claim to title to property, but does not actually establish it. ...
The definition of trade-in in real estate refers to a swap of houses. The trade-in program gives a seller of a property the chance to find an ideal replacement home for their family while ...
Have a question or comment?
We're here to help.