As a homeowner selling your home, you want to make sure you have a solid offer that doesn't fail. Unfortunately, even when buying a home with cash, the offer can fail, especially if the buyer has contingencies attached to their offer. Failure to sell a home is incredibly frustrating for any seller, and financial hardship is a common problem. The failure of a deal is one of the reasons why cash buyers are so attractive.
A common misconception is that cash buyers don't have to pay closing costs. Unfortunately, this is not the case. Closing costs cover all the paperwork and filing that must be made for a home to be officially sold. As a result, cash buyers still have to cover closing costs.
It's often beneficial for sellers to keep showing the home in case their current contract falls apart. Another way to find a buyer of cash is to simply sell it to one of the many companies that buy houses for cash. In other words, an escape clause helps protect sellers from missing opportunities to sell while waiting for the buyer's contingencies, such as the sale of the buyer's home, to be met. With a home sale contingency, the buyer must sell their home first before they can close their new home.
Some people will send letters to the seller, describing their situation and plans for the house. Buyers often use inspection results to negotiate a better deal or to ask the seller to handle repairs or include repair credits in the sale. For example, if you have a bank account that is full of cash but you decide to get a mortgage for your financial reasons, at least the seller knows that they have the money available as an alternative plan. There may be obstacles to overcome with respect to some of the contingencies discussed above; consider offering cash or a price reduction to compensate for a poor valuation or an unfavorable inspection.
In a contract, the buyer and seller can mutually agree to extend the closing date, usually if the buyer needs more time for loan approval or if they are pending the sale of their current home. In real estate, there are two main benefits of accepting a cash offer for a home, which tend to make it more attractive. Doing so will give the buyer more room to make that higher bid to win the home without exceeding the budget. There is a limited time for the buyer to complete the sale of their current home, after which the seller is free to withdraw from the contract.
A home sale contingency requires that the deal be closed contingent on the buyer selling their current property. A low appraisal is common in a seller's market when housing inventory is limited, reports USA Today. Similarly, contact a home inspector who can be taken to see the home within a few days to complete home inspections. That's why, in a multiple-bid situation, some sellers may accept a lower cash offer instead of a higher offer that depends on the buyer's loan approval.