You may have heard the term 💵 "cash is king" when it comes to buying a home 🏘.
So...why is "cash king" and what are the advantages of buying a home with cash vs. financing a home? Let's take a look.
The advantages a cash buyer has over a financed buyer are:
➡️ Quicker close: A cash buyer can closer quicker on a house than a financed buyer thus reducing the sellers holding costs. A cash transaction can close in as quickly as 14 days while a financed transaction can take between 21 – 45 days.
➡️ No appraisal contingency: A buyer paying cash does not have to get an appraisal on the house. There’s one less contingency that has to be removed. One less opportunity for the contract to bust out. A buyer who is securing financing will be required by his lender to get an appraisal. If the property’s appraised value does not equal or exceed the agreed-upon sales price, the buyer can terminate the contract.
➡️ No financing contingency: A cash buyer is not waiting to receive final loan approval from a lender. He already has the required funds to close on the purchase of the Spring TX house. A financed buyer may or may NOT receive loan approval. Although the financed buyer has initial loan approval/loan pre-approval, it is NOT full loan approval. If the buyer is unable to secure full loan approval, the seller's house goes back on the market.
➡️ On-time closing: A cash buyer offers a seller a guaranteed on-time closing. A financed buyer may or may NOT close on time. The financed buyer is at the mercy of his lender’s underwriter schedule and the timeline requirements for disclosure of closing documents. A cash buyer is not waiting for a third party to perform their tasks. He already has the money to close on the house.
✨ CASH is KING in real estate because it offers the seller more certainty that he’s going to close sooner and on time and at the agreed-upon sales price.