What's Better: Buying a House with Cash vs Mortgage?
Kelly K. | Nov 23, 2021
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By Kelly K. on Jul 27, 2021
We get it: selling a home takes the cake as one of the most difficult (and stressful) financial experiences we can face over the course of our lives.
From having to navigate challenging contingencies to worrying if your sale will close quickly and seamlessly, the selling process can be pretty overwhelming...to put it lightly.
Whether you’re anxious about the possibility of a long, drawn-out process or you’re worried about the costs associated with selling a home, you’re not alone.
As you know, when a deal falls through, you have to re-list your home. And when you relist your home, prospective buyers often assume there’s something wrong with the home, which can make it take even longer to get a new offer and, ultimately, cash in your bank account.
As a seller, there are three major benefits to accepting a cash offer on your house.
There are a number of advantages to accepting a cash offer instead of working with the approximately 86% of buyers who pursue a traditional mortgage. And in a hot real estate market, an all-cash offer doesn’t necessarily mean having to accept an offer below-asking price or dealing solely with institutional buyers.
It’s a common assumption that all-cash home purchases are a rarity. However, they account for a pretty healthy portion of property sales – representing 36% of home sales in 2020 alone, according to Realtor.com.
From a speedier close to cost savings, here’s a look at the three biggest reasons to consider an all-cash offer on a house.
Benefit #1: Cash Offers Close Faster
Maybe you’re relocating for an employment opportunity. Or perhaps you’re expanding your family and upgrading to a larger home. Whatever the case may be, by accepting a cash offer on a house, you’ll speed up the process of getting your house sold.
Sellers prefer cash offers because selling a home through a traditional mortgage lender is time-consuming, taking an average of 47 days to close (according to Ellie Mae). The culprit? Lenders require a lengthy underwriting process at the end of the sales process. With an all-cash offer, the average time to close is approximately 2 weeks.
Between the initial pre-approval and the loan finalization, if a buyer’s financial picture changes, or they fail to satisfy certain requirements, the lender can decide to decline their loan. The result? Your deal will fall through and you’re left back at square one of the selling process.
Benefit #2: Cash Offers Eliminate the Risk of Financing Falling Through
Month over month, NAR’s Realtors® Confidence Index continues to list “issues related to obtaining financing” as the primary cause of delays or terminations of real estate contracts.
From buyer financial troubles to third-party appraisals, several things can cause lender financing to be at risk.
If the buyer is unable to secure a traditional mortgage at all — or for the amount they "pre-qualified" for — they won't be able to purchase your home. As a result, you'll either need to pursue the next offer in your pipeline or place the house back on the market. Best case scenario: it's a hot market and the whole process starts all over. Worst case scenario: the market softens and it takes longer AND you need to lower the listing price.
But if you're presented with a cash offer, you don't have to anxiously chew down your fingernails, worrying that the deal could collapse at the 11th hour because of financing problems.
Benefit #3: You Won’t Lose the Deal Over an Appraisal Contingency
Another way a traditional mortgage lender can kill your sale is via an appraisal contingency. An appraisal contingency is a clause that states the contract can be terminated if the seller’s asking price isn’t consistent with the assessed market value of the house.
An appraiser’s evaluation combines tax records, prices of comparable homes recently sold in the local area, a personal assessment of the property’s condition, amenities and features, location in the neighborhood and several other considerations.
If your home doesn't appraise at the list price or higher, the lender can refuse to approve the buyer’s mortgage loan. Or, the lender may agree to finance the home, but the buyer would be responsible for fronting the difference. Oftentimes, buyers don’t have the financial means or are unwilling to cover the difference. If that's the case, the buyer can rescind their offer.
When you receive an Accept.inc offer, however, you'll have confidence the house has already been offer-checked and the sale is approved for the amount of the offer.
Enjoy the Benefits of a Cash Offer on Your House
From neighborhood parties to engagements to a baby’s first steps, your home is not only a reflection of you, but it’s also where priceless memories are made. What it shouldn’t be: a source of stress and anxiety when it comes to the home selling process.
We founded Accept.inc as a way to introduce a better kind of mortgage lending to the market – one that gives everyday homebuyers the power to buy a house with cash. As a seller, this translates into a streamlined process that solves many of the problems associated with the old way of getting mortgages.
Helping you sell your home 3x faster than the national average and avoiding deals from crashing and burning is what we’re all about. Because having to relist a home is certainly not our definition of fun, and we’re guessing it’s not something you want to experience either.
All you’re responsible for is accepting the strongest all-cash offer in real estate! To learn more about the benefits of partnering with Accept.inc, download our free Seller Information Packet today.
Kelly K. | Nov 23, 2021
Kelly K. | Nov 23, 2021
Kelly K. | Nov 22, 2021