Why Cash is King as a Real Estate Buyer

Whether you are buying a house to live in or as an investment property, paying with cash will always give you more negotiating leverage. We’ve all heard the saying “cash is king.” Real estate buyers throughout history have found this statement to be very true time and time again. The more cash you have to put toward your transaction, the better it will generally go.

Some home buyers are ready, willing and able to pay all cash toward the purchase of a property. An all-cash transaction is especially attractive to sellers, real estate agents, escrow companies and anyone else involved in the process. Even if you aren’t paying all cash, you will benefit from applying more money for your down payment. Mortgage lenders and private investors can offer better interest rates and loan terms when additional cash is on the table. It will also mean you owe less on your real estate loan, which allows you to pay it off faster and increase potential profitability.

Here are a few more reasons why cash is king as a real estate buyer:

Faster Closing

Cash real estate transactions can be completed much faster compared to those with mortgage loans and other complicated details involved. You aren’t waiting on a loan approval from a mortgage lender or bank. You have cash in hand and the closing process is much less complex. The title deed can be transferred to you quickly and without much hassle. The seller can pay off any of their remaining mortgage loan principal and then get any leftover funds wired directly to their bank account. Cash home sales can take as little as a week, compared to standard 30-45 day (sometimes as long as 90 days) closings on loan-based real estate transactions.

Seller Appeal

Because of the faster closing process and much less complicated steps involved, home sellers are excited by the prospect of a cash home sale. This is great for highly motivated sellers who are looking to sell as soon as possible for financial or personal reasons. Even regular sellers who aren’t in any particular rush will see the excellent benefits of a fast cash home sale. This provides the property buyer with more negotiating power. You may be able to work out a more favorable deal, including a lower price and other seller concessions. You are simplifying and speeding up the home selling process for them and that should work in your favor.

Simplification

The deal will also be easier to get done on your end if you are buying houses with all cash. It may open up more home buying opportunities and investment potential. You can get deals done quickly, which simplifies things for your bookkeeping and taxes. Everything generally goes much smoother with cash real estate transactions, benefitting both the buyers and sellers in a number of ways.

If you are looking to buy houses and are ready to make more cash transactions, consider joining the PropertyLark home buying network. Our exclusive resources will give you more access to off-market deals and tools that will help you identify and secure the best real estate investment opportunities. Fill out the form to the right to see if you qualify.