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
Restoring real property to an improved state. The restoration is usually needed because the property's condition has worsened. ...
Right to select something or perform some act. An example is a renter of property that is given the option to buy the home at the end of the rental period or to renew the lease. Not ...
In urban areas, one way to organize urban development is to keep track of building density. The building density definition is a way to determine the concentration of buildings in a given ...
Appropriateness of the soil for the designated purposes. An example is soil suitable for the growing of vegetables and fruit, or grazing for horses. ...
Act of receiving the rights and privileges of a citizen including property rights. ...
Regulation of the Securities and Exchange Commission (SEC) establishing the criteria to avoid a private offering. For example, John wants to sell shares in an apartment house to several ...
Detailed financial accounting of all the credits and debits for the buyer and seller upon consummation of a real estate sale. ...
Insurance affording protection against losses due to damage to or destruction of property or contents therein. Insurance protects assets and any future income thereon from loss, such as a ...
Bankruptcy declared by any insolvent person or business. In contrast to involuntary bankruptcy, which is applied for by the creditors. ...
Have a question or comment?
We're here to help.