Today’s market is hard for a buyer because of the low inventory. In this sellers’ market, a cash buyer has the real advantage. A study from the University of California San Diego concluded that all-cash buyers have paid around 11% less than those using a mortgage in the last 10 years. In fact, cash sales accounted for 23% of home sales in July 2021 and increased to 27% in July 2022.
When a buyer brings an all-cash offer to the table, it does not mean they will bring a huge briefcase full of money to the closing table. An all-cash offer means they are buying the house outright. This means that a buyer must have money in an account that can be immediately withdrawn or transferred to cover the home’s purchase.
A cash offer has many advantages such as limited contingencies, less hassle and fees, streamlined closing procedures, and possible savings. They not only have these advantages but can also speed up the home buying process. In some cases, a seller will accept a lower bid if it is all cash due to quicker closing times and lack of many buyer-financing risks.
In today’s market, lenders have come up with ways to purchase a home with cash even if you do not have the funds readily available. Many lenders throughout the country will offer the ability to buy a home with cash and secure financing afterward.
With the housing market being so hot for sellers, it is more competitive than ever for a buyer. Having the advantage of an all-cash offer will give you a better chance at a seller accepting your offer over all the others in the bidding war.