What Is a Cash Offer, and Is It Worth It?

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A cash offer occurs when a buyer approaches a seller with an offer that will be paid in cash rather than through a mortgage lender. Cash offers happen much more often than you might think. In 2018, over a quarter of offers made on properties were cash offers. 

A cash offer might look attractive to both buyers and sellers, but there are some upsides and downsides to cash offers. Here’s what you need to know to decide if a cash offer is right for you.

Cash Offers for Sellers

There really aren’t too many downsides to taking a cash offer from a buyer. You’re getting the money up front without a lender, which means you have instant liquid assets you can use to buy another home or purchase other investments. You also don’t have to worry about complications with a lender, either during closing or during payout.

There are some other advantages as well. You’ll be able to close on the home faster, which is always good for both buyers and sellers. You’ll also be able to skip an appraisal and inspection, unless the buyer asks for them.

However, there is something to be said for working with a lender. A cash offer isn’t going to be as much as an offer from someone getting a mortgage. If you are in this for the long haul, you might want to consider taking the higher offer.

Cash Offers for Buyers

Cash offers are good for buyers as well. When you make a cash offer, your credit score never comes into play. This is one of the biggest advantages to cash offers for many people. Another advantage is that your costs will be lower because you don’t have to worry about paying for an appraisal, and your closing costs will also be lower. You’ll also save money over time by not paying interest.

There are also some reasons to go through a lender. A mortgage can help you build your credit. It can also qualify you for tax deductions. Many people go through a lender for the simple reason that buying a house with cash throws all of your liquidity into one hard-to-move asset.

If you are curious about whether or not a cash offer is right for you, or if you are getting or making a cash offer and need title services, contact us today for more information or to get started.