Evaluating Cash Offers
An all-cash offer does not necessarily refer to the source of funds. In other words, a buyer may still be using a loan to purchase the home. However, the closing of the sale is not contingent on the buyer getting that loan. Since you don’t need to allow time for the buyer’s loan to fund, accepting a cash offer can make for a quicker sale. However, there are several questions you should consider asking.
A fast transaction isn’t always a smooth transaction. Additionally, you may need to time the purchase and move-in date of your next home, and a speedy sale could cause a gap in housing.
Confirming proof-of-funds is critical when considering a cash offer. Consider requiring a proof of funds letter from the buyer’s bank or other source of funds. A buyer may use a line of credit to purchase your home, which is different from a buyer who has the cash sitting in their account.
Lastly, a buyer may use a cash offer as an incentive to pay less for your home because they are removing contingencies and permitting a faster sale. At the end of the day, you’ll need to determine whether the discount on price is worth the time saved.