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.
Have you received a cash offer on your home? Are you considering making a cash offer or just want to compete with buyers who do? This guide can help.
If you’re interested in a cash offer on your home, Opendoor can help. We’ll buy your home directly with a competitive offer. See if your home qualifies.
How Common Are Cash Offers?
Cash offers are probably more common than you think. According to ATTOM Data Solutions, cash sales nationally accounted for just over a quarter of all single-family home and condo sales in 2018. Though it’s well below the cash offer peak (that was 38% in 2011), it’s significantly higher than the pre-recession average from 2000 to 2007, which clocked in at 19%.
This number varies by city. According to the same ATTOM Data Solutions study, metropolitan statistical areas (among a set of 200 with at least 200,000 population and sufficient cash sales data) with the highest share of all-cash purchases in 2018 were Montgomery, Alabama (54%), Naples, Florida (53%) and Macon, Georgia (51%).
Typically, Cash Offers Tend To Be More Common In These Scenarios:
An investor (or investment company) is interested in the property
- The buyer has just sold their previous home and has sale proceeds to pull from
- The seller has approached an iBuyer about buying the house
- There’s lots of competition and a buyer wants to stand out
- The property is in need of repairs or renovations and is attractive as a fix-and-flip home
Cash offers can crop up in any transaction though, not just those mentioned above. If you’re planning to buy or sell a house in the near future, it’s important to be aware of these offers and how they work.
Cash Offer Considerations If You’re Buying A House
So, should you put in a cash offer on a house? Just because you have the means doesn’t necessarily mean it’s the right move. Though there can be advantages to making an all-cash bid, there can be downsides too.
Here Are Some Pros And Cons You Should Keep In Mind As You Make Your Decision:
Pros of making a cash offer:
- They give sellers more confidence
- They can offer a faster closing period
- Your credit score doesn’t factor into the process
- You don’t need a home appraisal
Pros and Cons
Pros of accepting a cash offer:
- There is no risk of buyer financing fall-through
- The closing process is usually faster
- There typically won’t be an appraisal
- You might avoid some contingencies
Cons of accepting a cash offer:
- It might be lower than other offers
- The buyer usually isn’t vetted as thoroughly
If you do sell to an all-cash buyer, it’s important to understand the pros and cons and ensure you’re making the best decision for your situation.
How Open Door Can Help You With An All-Cash Offer
If you’re selling your home (or even just considering it), a cash offer can sound pretty tantalizing. After all, the closing process is often quicker and there’s no risk of buyer financing fall-through.
Opendoor puts that cash sale within reach. There’s no need to list, stage, or market your home, and if your home qualifies, you get a competitive, preliminary offer in minutes
If you’re buying a house, think long and hard about putting all your cash into one asset. Consider talking to your accountant or financial advisor, and make sure you understand the full picture before moving forward with an all-cash bid.
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