Question:
“Gary, a question. As the seller, what is the difference between a cash offer and one where the buyer gets a mortgage? Essentially, what’s in it for me? Are my closing costs lower with cash?”
Answer:
Your costs aren’t lower. What’s in it for you is:
- Your sale is more certain
- Possibly a shorter escrow
The reason it’s more certain is that you don’t have to worry about such things as…
- Will the appraisal will come in high enough?
- When will the bank give an answer on the loan?
- Will they even approve the buyer?
- Will the bank move slowly and delay the closing?
And the reason you can have a shorter escrow is that loans usually take 21 to 45 days for approval. If there’s no loan, you can close as quickly as 7 to 10 days.
So while cash offers are obviously more desirable, the majority of buyers need a loan. So I don’t want you to worry if we sell to someone who needs financing.
I screen buyers’ qualifications very thoroughly and appraisals usually come in high enough, so it’s rare the bank actually turns a buyer down on one of my sales. If we have a glitch, it’s usually the bank moving a little slower that we’d like.
