This article is for those who can offer and accept cash for a house. Here are significant things to keep in mind to successfully close the deal.
Property owners/sellers in Oakland often find it beneficial to get cash for their houses. This is because the process of property transfer gets much easier and faster. It is very different from placing homes for rent in Oakland CA. The seller doesn’t have to worry about potential financing failures from the buyer’s end. He gets his money and closes the deal.
In this article, we will throw light on what is a cash offer on a house and how it works.
Read: What makes Oakland a great option for a high-quality life?
Meaning of Cash Offer On A House
A cash offer is a buyer’s offer to the seller, to pay the entire price of the house in cash. It does not involve any mortgage or financial aid. Once both the parties agree, the buyer makes the cash payment to the seller. Buyers typically try to make cash offers to sellers, who in return tend to accept them, even if they are lower than the mortgage offer made by some other buyer. Hence, cash offers are quite popular in real estate.
Difference Between A Mortgage Offer & Cash Offer On A House
Often, sellers accept cash offers over mortgage offers, owing to its several benefits. In this section, we will highlight how the two offers differ, with the cash offer being preferable.
- Home Appraisal
In a mortgage offer, the buyer’s mortgage lender demands a home appraisal to minimize financial risk by making sure that the buyable home is worth the asked amount. This is not done in the case of a cash offer, as there are no finances involved. However, a cash buyer can opt for a home appraisal to be confident about the amount he is paying.
- Ease of Processing
A cash offer closes faster as compared to a mortgage offer. It doesn’t put the seller at risk. This is because he gets paid sooner and doesn’t have to wait for the mortgage underwriting and home appraisal process to finish. Due to this reason, even if a mortgage offer offers more, sellers are more likely to choose cash offers.
- Proof of Financial Aid or Funds
In the cash offer, the buyer has to present proof of a lending financial institution before the seller. Showing proof of funds such as a bank or financial statement, is essential to ensure the seller and close the deal.
- Buying at a Lower Cost
With a cash offer, buyers can save a lot of money as the cost can be quite low. This is because, in mortgage offers, buyers incur many costs including, mortgage initiation costs, loan processing fees, credit check charges, interests, etc.
- Risk To The Seller
In a cash offer, less risk is involved for the seller. This is because mortgage offers typically take 30-60 days to complete. During this duration, the buyer may face any changes in the finances or get denied his loan. This isn’t the case with a cash offer. It takes place swiftly and avoids risks for the seller.
- Availability of Properties
There is a good range of available properties for cash buyers. They can buy properties in different locations. However, with specific types of mortgages, buyers cannot buy properties in all places and under certain conditions.
Similarities Between A Mortgage & Cash Offer On A House
While there are many differences between the two offers, there are similarities too. In both offers, buyers require a real estate agent to be the middleman and close the deal effectively. Real estate agents are highly skilled negotiators. Plus, in exchange for a fee, they will draft your purchase agreement and complete the house appraisal processes.
Secondly, while mortgage buyers have to conduct home appraisals, most cash buyers willingly go for home inspection. Through this, they make sure that the house is worth the amount paid. If not, they can negotiate a lower price with the seller and fix the house with the remaining cash.
Conclusion
We hope that sellers and buyers found the above information beneficial to successfully close the cash deal for a house. Those who are thinking about putting or taking apartments for rent in Oakland CA have nothing to do here unless they want to sell or buy one. They must check out the rented properties on the official website of Raj Properties. Drop your inquiries and get a chance to visit the most sought-after rented properties in Oakland.