Sellers Guide to Negotiating a Cash Offer on a Home
- butterflyprofessio
- Jun 1
- 3 min read
Seller’s Guide to Negotiating a Cash Offer On a Home
The process of selling your home can be tricky. There are many moving pieces including finances, a home inspection, and any contingencies your buyer adds to their offer. One way to avoid some of this real estate messiness is to accept a cash offer for your home.
With a cash offer, the buyer agrees to pay you the total sale price in cash without the need for a mortgage. There are benefits to this type of sale, including a faster closing and no risk of the financing falling through at the last minute.
This handy guide to negotiating a cash offer on a home will help you maximize the value you get in return for your property.
How Does a Cash Offer Work?
A cash offer is when the buyer pays for the entire price of the home upfront. They don’t take out a mortgage to pay for the home. There are a few differences between a cash offer and a financed offer, including:
The buyer must demonstrate proof of funds before making an offer
An appraisal isn’t required
Closing can occur faster
Closing costs will be lower
Buyers don’t have restrictions on the home they make an offer on
As a seller, you have the ultimate power to decide which offer you accept for your home.
What Does a Strong Cash Offer Include?
Once those offers start pouring in, you need to know what to look for. It can be tempting to only look at the price the potential buyers are offering to pay, but there are many other factors that can make a cash offer stand out. Some key things you want to see in a solid cash offer include:
Close to your asking price – The biggest thing most sellers are concerned with is the price. You want an offer that is reasonably close to your asking price. Of course, this assumes that you’ve priced your home fairly for the market and home’s condition. You’ll need to do your homework before listing your home for sale to ensure that the price you ask for is appropriate.
No contingencies – A cash sale allows you and the buyer to negotiate the transaction’s conditions. Some cash buyers in a competitive bidding situation may be willing to waive a home inspection contingency in return for a slightly lower offer. If you accept an offer without contingencies, you may make a little less money in the sale—but you’ll have the assurance that the transaction won’t be derailed by an inspection.
Closing date that works for you – If you need to sell your home quickly, accepting a cash offer can help you do so. Cash offers skip the financing steps that often delay or cancel a real estate transaction.
A legitimate buyer – Before you agree to an offer, the buyer should demonstrate that they have the funds available for the purchase. You can request that they provide you with proof of funds from their bank. An earnest money deposit also shows that the buyer is serious about committing to the sale.
What Are the Benefits of a Cash Offer for the Seller?
There are several benefits to accepting a cash offer. The transaction can occur faster and you don’t have to worry about financing falling through. If you’re selling your home in a competitive market, you might be lucky enough to receive several cash offers. You can weigh the pluses and minuses of each of these offers to decide on the best one for your needs.
Are There Any Drawbacks to a Cash Offer?
When a buyer makes you a cash offer, they do have a little more control over the transaction. This is because the buyer can determine:
The price they’re willing to pay
If they want you to pay closing costs
When they want to close on the home
If they want a home inspection
All of these factors can impact if the sale goes through and the amount of money you receive when it does. For instance, if the buyer asks you to pay closing costs as a contingency of the offer, you’ll have to deduct that amount from your total profit. If you don’t agree, they can simply withdraw their offer.
Sources:
Trulia. How Do Cash Offers Work? https://www.trulia.com/guides/cash-offer-on-house/
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