4 Benefits of a Cash Home Purchase
Whether you are a real estate investor or a regular home buyer, there are several benefits to paying all cash if you have the means. Assuming you have the necessary finances, here are the cash home purchase advantages that you should consider:
1. Fewer Complications
One of the primary advantages of buying a house for cash is that the process will be much simpler for you and the seller. The purchase isn’t contingent on another property sale and there is no mortgage that needs to be approved. You may work out specific details with the seller as part of your cash sale contract (such as which inspections you require and if any repairs are needed), but generally there aren’t many—if any—complications. You are paying all cash and that should make things go much smoother throughout the entire transaction.
2. Faster Closing Process
Because the process is generally less complicated, that also means it can go much faster than a traditional mortgage-based transaction. A cash home purchase can be completed in weeks if everything goes smoothly. This is compared to the month or two it may take for the escrow process during a traditional sale that involves home inspections, property appraisals, mortgage approval and other financing procedures required by the lender and title company.
3. More Attractive Offers
To put it simply, sellers love all-cash offers if they feel the price and other terms are fair. Sellers know and understand the same advantages as listed above and they will typically welcome the faster, less-complicated closing process. Your cash offer will look much more attractive against a complex offer that has contingencies or a complex financing scenario. Sellers know there’s less time and opportunity for a cash buyer to back out and there is no worry of the financing falling through and killing the deal.
4. Lower Purchase Price
Last but certainly not least, many cash buyers benefit from being able to purchase properties at lower prices than traditional mortgage buyers will have to pay. This is how many successful real estate investors make a living by paying less and turning that property into great profit as a rental or flip. Even regular home buyers paying cash may be able to pay a little less for a property they want if the terms are attractive to the seller. The seller may be willing to take a little less for their home to simplify and shorten the transaction.
There is a definite art to crafting a good cash offer if you are looking to buy a house or investment properties. It pays to understand the seller’s situation and to run the necessary property analytics. This will help you determine the right price and the best terms to get a deal done as easily as possible.
If you are looking to buy homes for cash, consider joining the PropertyLark home buying network. We’ll offer you access to great off-market deals, advanced home search tools and proprietary property analytics software. You can find the best properties and make the best cash offers.