A buyer needs liquid cash-enough money in the bank to cover the balance of the purchase price and closing costs. ... For this reason, a cash transaction may not proceed any faster than a mortgage-financed purchase, and there is still a chance the deal will fall through.
Yes, all–cash offers can fall through. This can happen, for example, if you have a professional home inspection done and defects are found, or if there are problems with the property's title that need to be resolved. A seller may also reject a cash offer if they don't trust the source of the funds.
To put it simply, a seller can back out at any point if contingencies outlined in the home purchase agreement are not met. These agreements are legally binding contracts, which is why backing out of them can be complicated, and something that most people want to avoid.
A cash offer is an all-cash bid, meaning a homebuyer wants to purchase the property without a mortgage loan or other financing. These offers are often more attractive to sellers, as they mean no buyer financing fall-through risk and, usually, a faster closing time.
All-cash offers are very appealing to sellers because they tend to close faster and there are fewer risks than with mortgage-contingent offers, which are vulnerable to delays and denials.
Advantages of being a cash buyer
Cash buyers typically come chain-free as they don't have a property to sell in order to make the purchase – so there is no risk of additional or external influence from related transactions causing the property transaction to fail.
A cash offer contains no finance contingency but that does not mean the offer is contingency-free. ... For this reason, a cash transaction may not proceed any faster than a mortgage-financed purchase, and there is still a chance the deal will fall through.
This not only makes you more likely to get the property you want, but also puts you in a great negotiating position – as selling a property to cash buyers is often faster, safer and simpler than selling to someone requiring a mortgage, you're much more likely to get an offer accepted that's lower than the asking price.
Cash buyers may not need a mortgage lender, but they should still find a real estate agent to work with. Agents are invaluable in the nitty-gritty of negotiations, drawing up your purchase agreement, getting an appraisal, and more.
If the purchase contract hasn't been signed, the seller could accept another offer, even if you think they've accepted yours. The seller generally cannot cancel your contract if you are in compliance simply because the seller received a better offer from another buyer.
An offer to purchase a property can be rescinded or withdrawn at any time before it is accepted. For a rescission to be effective it must be given as a notice in writing and received by the other party. ... Rescission of an offer is not effective until it is delivered to the other party.
A seller cannot accept another offer if the listing became “in-contract.” A home is “in-contract” after the buyer and the seller have signed the contract. The buyer needs to pay the downpayment at the time of signing.
However, there are exceptions, so as long as you are not absolutely in love with the property and can afford to let it go, it's usually worth it to try for the lowest justifiable offer you can make, even 10 or 20% under asking.
Buyers use the phrase “all-cash offer” to indicate they don't need to borrow money from a lender to close on the purchase. (It doesn't mean the buyer is coming with a bag of cash or even a bank certified check.) ... So, they tell the sellers they will buy in an “all-cash” transaction.
The process is much faster
A cash sale releases funds to the seller very quickly, and the deal can go through in a matter of weeks. ... This is a significant advantage to the seller if they need to access funds quickly or if they need to move swiftly for work purposes or other personal reasons.
While most of the fees we've discussed typically fall to the buyer in one way or another, many of them can also be paid by the seller if the right agreements are reached. It all depends on your specific situation and how much you're willing to haggle.
In conclusion, yes, real estate agents can lie about offers. However, it is more likely they are using vague “sales speak” or being upfront about a specific proposal. It is up to you to discover which, retain control over your purchasing and to act in your own best interests.
When there are multiple offers, the seller typically takes one of three actions: Accepts the most favorable offer. Counters all offers to give everyone a chance to come back with a better bid in an effort to get the best price and terms. Counters the offer closest to the price and terms the seller's seeking.
An accepted offer is not legally binding until contracts are exchanged. This means a buyer can back out of the sale at any point up until contracts are exchanged. This is also the same for the seller.
Once signed by both buyer and seller, your offer to purchase becomes a legally binding sales contract, at which point you can no longer withdraw your offer unless certain contingencies are not met. For instance, if your loan does not go through, you are not obligated to purchase the home.
A home buyer can withdraw an offer at any time until the offer is accepted by the home seller. ... If the seller changes her mind after accepting an offer, especially if the terms of the listing agreement have been met, she usually still owes the broker a commission.
When it's reasonable to offer 1% to 4% or more below asking
A good reason why you may want to offer below 5% is when you're paying with cash (although companies who offer sellers cash for their home will typically offer 65% below market price).
The majority of sales were agreed with 6-15 viewings. With a decent agent you should expect to get roughly 1 viewing every week and a half and be under offer within 14-16 weeks.