How to Make a Cash Offer on a House — The Right Way

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By Clever Real Estate Updated October 21, 2021


Whether you’ve found your dream home or you’re looking to make a purchase for investment purposes, having the capacity to make an all-cash offer can put you in a distinct advantage over other buyers in the market.

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If you're in a position where you're able to purchase a property on an outright cash basis, then you're potentially at a significant advantage over other buyers in the market. One of the key reasons for this is that from the perspective of the seller, you'll be putting cash in their pocket a lot sooner.

In fact, with an average time frame of 30 and 45 days between the point of an offer and the official closing date, you'll likely be able to get this down to just seven days. Moreover, sellers are highly incentivized by cash offers because they alleviate the risks of the respective lender pulling out of a mortgage agreement, which would otherwise jeopardize the sale.

Finally, it is also worth mentioning that by buying a property with cash, you’ll have 100% of the equity available in times of financial emergencies.

With all that being said, if you are looking to make a cash offer on a house, there are still some pertinent factors that you need to consider. Let’s take a look at what you need to do.

Get the ball rolling

Once you've found a suitable property on the market that you want to make a cash offer for, you'll need to speak with a local agent to get the ball rolling. First and foremost, you'll need to find out whether or not any other offers have already been made on the property.

If this is the case, then you can get your agent to submit an all-cash back-up offer, should the current buyer fail to follow through with the deal. Furthermore, it is also important that your agent makes the seller aware that you have put a cash offer on the table, as this will likely make you stand out from other buyers in the market.

Give the seller some flexibility

Although in the vast majority of cases, the seller is likely to want to close the deal as quickly as possible, there might be instances where they need a bit more time to prepare for the move. This might be because they are waiting for their new home to be made available for move-in.

If this is the case, then be prepared to let them stay in the property for slightly longer than the average 7-day period that it takes to close an all-cash deal.

Prove that you have the cash

In order to provide the seller with assurances that you actually have the cash available to purchase the property, it might be a wise move to send them some evidence. This is a rather simple task, as all you will to do is get a proof of funds document issued by the bank you're storing the funds with.

Take note, buyers prefer it when the proof of funds document has been issued by a U.S. bank.

Don’t make assumptions on price

It is important to note that just because you are making a cash purchase, this won't give you free rein to make a low-ball offer. While in certain housing markets this might work, you have to remember that the seller will still be receiving cash no matter how the deal is funded. In other words, most sellers are happy to wait the standard time-frame of 30-45 days if it means getting a fair-value offer.

In this scenario, your best bet is to use a highly experienced real estate agent that has long-standing knowledge of the local area in question. They'll be best suited to ascertain whether an all-cash offer is likely to tempt the seller to accept a lower price.

Understand the importance of an appraisal

Although you might have found your dream home and the seller is willing to accept your offer for an all-cash deal, it is crucial that you still obtain an independent appraisal.

This will at the very least substantiate the purchase and ensure that you're paying the right amount — even if you think you're getting a good deal. Nevertheless, if you're using an established real estate agent, they'll guide you through the process of obtaining an appraisal.

Making a Cash Offer on a House: The Verdict?

To summarize, there is no denying that having the ability to make an all-cash offer puts you at a distinct advantage over other buyers that are potential competitors in the housing marketplace. As most sellers see cash offers as a huge benefit, you’re likely to be prioritized over those facilitating a deal with finance.

However, this isn’t to say that you’re guaranteed to walk away with your property of choice at a below-par value. On the contrary, sellers will often be happy to go with a buyer that requires finance, should they be getting a better deal.

Ultimately, if you are in a position to make a cash offer on a house, then it is still highly advisable to use an experienced local real estate agent. In doing so, not only will they be able to guide you through the cash purchase process, but they’ll also have the required knowledge of the local housing market to determine whether a potential discount is on the table.

If you’re looking for a local agent to assist you with your cash purchase, be sure to consider a Clever Partner Agent.

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