All Cash Offer vs Financing

Buy my house Omaha may have been one of your thoughts If you’ve been trying to sell your house in Nebraska.

You may have at one point considered an all-cash offer. Not all home sellers know this, but you don’t have to go down the route of traditional real estate financing to sell your home. You can get the full price in cash with no closing costs or underwriting process. 

Read on to learn how cash buyers operate. 

about cash home offers

About Cash Home Offers

Homebuyers typically fall into several categories. Some will finance a home purchase via a mortgage loan from the bank. If you sell your home through a real estate agent, you will usually deal with those kinds of buyers. 

On the other hand, other buyers pay cash. They don’t take out a home loan – they have the cash on hand to pay for your house upfront. While there are some downsides to selling to a cash buyer, there are also many benefits. 

Since the homebuyer doesn’t have to deal with a mortgage lender, the process won’t drag out. As long as they provide proof of funds, and you feel comfortable following through on the sale, you can get your cash in as little as a few days. 

You may get a lower cash offer than if you were to sell to someone taking out a home loan. However, if it’s a seller’s market, you don’t have anything to worry about. In a hot market, you can get your asking price or slightly less.

Why would someone buy a home with a cash purchase? The main reasons include:

  • A lower sale price in competitive markets
  • Lower fees and no need to deal with high mortgage rates
  • Their credit score doesn’t matter as much
  • A quicker closing timeline and fewer contingencies (that makes it easier to buy and flip houses for profit)

About Financing a House

Many buyers don’t have the money on hand to pay for a new home upfront. Instead, they turn to a bank or other lender to provide the money. Typically, they’ll need to pay a down payment, but that’s not all. 

In addition, they will have to agree to a home inspection, so the lender can determine whether the new home presents a significant risk that would make the loan not worth it. If you want the sale to go through, you should also get a home appraisal yourself to ensure that no hidden issues and structural damage exist. 

If such damage does exist, you may have to pay for the renovations first. Otherwise, few lenders would agree to the loan. 

Why would someone buy a home with standard financing? Here are the main reasons people do it: 

  • No need to fork over a large amount of cash upfront for the home sale
  • Borrowers with good credit scores can get mortgages with decent interest rates
  • While the inspection contingency slows down the homebuying process, it helps the buyer determine the home’s value

All Cash Offers vs. Financing

One of the largest differences between all-cash offers and selling to a buyer who uses financing is that you’re guaranteed to get your money quicker from a cash buyer. If you need cash fast, whether to pay your medical bills or to finance your move to a new state, an all-cash offer is the way to go. 

Rather than paying a monthly mortgage payment, the buyer will use their funds to pay the listing price or agreed-on price in full immediately. You can get your money the same week. The buyer will have it all over with as well, without needing to pay a monthly fee or refinance their mortgage later on. 

Since there is no loan involved, there is no need to wait for pre-approval for the loan. In a competitive real estate market, knowing that you have a ready and willing buyer who can buy your home right away will be a great relief. 

Home cash purchases are less frequent than other methods, but they’re more common than you may think. Around 30% of home sales in the first quarter of last year were cash sales. 

Cash buyers can include iBuyers, house flippers, and long-term investors in the housing market. They also include people who have enough funds to pay for their future homes in full. 

Financing Types

There are several types of mortgages that buyers tend to use. Some mortgages have fixed rates for 15-30 years, while adjustable-rate mortgages may have longer repayment periods but offer rates that change every year. 

There are also loans that the Federal Housing Administration and the Department of Veteran Affairs back. Only certain people qualify for these government-backed loans. 

Some buyers may also get seller financing, which is when the seller provides the buyer with a loan. It typically comes with high-interest rates and is more common when the seller and buyer have a previous relationship (i.e., selling to friends and family). 

all cash offer vs financing

Benefits of Cash Offers vs. Financing

One of the best things about a cash sale, besides the faster closing, is that there are no additional fees involved. For example, many cash buyers are willing to offer a fair purchase price to buy the home as-is, with no appraisal contingency.

Selling a house as is to a cash buyer is easy, as most cash buyers aren’t buying your home to live there. They usually fix it up and sell it for a profit. You won’t have to pay any appraisal fee. 

That also makes cash offers better suited for people with damaged homes. If you inherited a home from your grandmother, and that house was in disrepair, fixing it up can cost you more money than you have. You might just want to get it off your hands ASAP. Depending on the state of the home, that may be extremely difficult.

You can also avoid other fees by selling your home to a cash buyer. For example, since you will be dealing with the buyer directly, there will be no need to pay a real estate agent commission. Agent fees are typically around 5-6%. That can easily translate to dozens of thousands of dollars. 

Of course, cash sales aren’t for everyone. It’s essential to weigh the pros and cons of each option before deciding on a course of action. 

For example, if you don’t have a rushed timeline, and you are sure that your home is in perfect condition with no hidden damage, it might be worth using a regular real estate agent. It still depends on how much more money you can get, though, as you also have to account for fees. 

On the other hand, if you’re in a rush to get rid of the house, and you can’t seem to find any buyers due to structural damage or any other reason, sell it through a cash buyer. 

The type of cash home buyer you deal with matters, too. First-time cash home buyers might be planning on living there themselves. Therefore, they may be more likely to try to get a better deal, or they might ask for a home inspection. 

On the other hand, companies that buy houses in Nebraska for cash will know what an appropriate price is, and they also won’t require additional contingencies. If the company has good reviews, you can trust them to close the deal and provide your money quickly. 

Our cash offer process for a house is rather simple, with minimal hassle. 

Conclusion

There’s a reason cash home sales are becoming increasingly popular. They offer a level of flexibility and quickness that you can’t get from a traditional home sale. 

A cash sale also offers peace of mind. You won’t have to worry about negotiating for days or weeks on a price, dealing with open houses, and chasing after buyers. We buy houses in Lincoln, so get in touch with us to learn more!

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