In 2019 alone, just over 5 million existing homes were sold. 

Many of us can relate to the stressful process of buying or selling a home. It’s a difficult process because there’s no rulebook on exactly what to do. Between the different markets and agents, you never quite know what’s going to work best. 

One of the most debated topics around buying a home is whether or not offering cold, hard cash is best. Many people think that by offering cash that their offer will be the first to be accepted. 

Is this true? Should you accept a cash offer as a seller? Keep reading to discover 7 things you need to know to learn what is a cash offer in real estate. 

1. Take a Look at Who the Buyer Is

While not always, there are a couple of main buyer types when it comes to an all-cash offer.

One popular type of cash buyer is the investor. This person is wealthy and able to offer cash for their offer. They probably have at least a couple of properties, but they only have one main home in which they stay.

They’re planning to buy your home, do some fix-ups, and start renting it out for income. When they see your home, they don’t see a home. They see a business opportunity. 

Another type of cash buyer includes the house flipper. They want to buy your home at a low price, completely flip it and sell it at a high price. 

2. Emotion vs. Income

While selling to investors or house flippers may not be a bad thing, you have to take the time to see what situation you’re in. Could you use the quick cash, or do you want to wait it out for a possibly higher offer?

Accepting a lower offer in cash might be good for those sellers who need to get out quickly. It could also be good for the sellers who didn’t have the money to fix things up themselves. It’s quick income and a quick escape.

If you’re wanting a possibly higher offer through a traditional sale, it might take longer to sell the home. However, people making traditional offers might be more emotionally invested in the home. 

Don’t only think about what situation the buyer is in, but take time to understand what situation you’re in as a seller. 

3. Skip the Hassles

If you’re someone that wants to avoid hassles at any cost, accepting a true cash offer is the best route to go. You’d be able to walk away with a clearer head and cash in your hand. 

Accepting cash helps you avoid the long appraisal and inspection process. Cash buyers are expecting some problem areas, and many of them are even excited to fix them. 

Because they’re expecting a handful of repairs, you don’t have to keep spending all of your money on fixing everything. Complete any repairs you deem as necessary, and leave the rest for the flipper. 

As a bonus, expect significantly less paperwork when accepting a cash offer.

4. Cash Closes the Door

When selling a house to a cash buyer, you’re closing the door on the bidding. Depending on your situation, this could be a good or bad thing. 

If you’re wanting to quickly move on and out of town, closing the door on competition between bidders is the best option. Get your cash and go!

However, if you close the door too early, you could be missing out on a more traditional, yet higher offer. Decide how long you’re willing to wait around. 

Some people gain a thrill from watching competing offers build around their home. 

5. Is It an iBuyer?

Technology has introduced us to many new things such as iPhones and iBuyers. Real estate just got a tad smarter with the introduction of iBuyer companies because it removes the need for showings and paperwork.

This type of company uses AMVs (automated valuation models) to determine the value of a home, extend a true cash offer, and then remodel the home to sell at a higher price. 

Like selling to an investor or flipper, this type of sale offers quick cash. It’s up to you whether or not you take it. 

6. Cash Could Be a Low Offer

One of the downfalls of accepting a cash offer is releasing the possibility of a higher, more traditional offer. If you’re looking to get the most bang for your buck, it’s best to wait it out for high offers.

This is especially important for people who have invested a large amount of money into their home or those who may need a higher offer to fund future endeavors. 

Waiting it out for high offers will take plenty of patience, and you’ll want to find an agent you can trust to market your home. 

7. Watch Out for the Scammers

Have you decided to list your home on a platform like Craigslist? You should be watching out for scammers. 

Believe it or not, there are plenty of frauds out there waiting to make fake cash offers. It’s a situation no one wants to find themselves involved in so make sure to be alert.

It’s Your Decision

At the end of the day, it’s your decision whether or not you want to accept a cash offer for your home. There are many pros and cons to weigh but always go with your gut.

It’s your home to sell and no one else’s so make the choice that benefits you!

Selling Your Home: What Is a Cash Offer in Real Estate?

What is a cash offer in real estate? That’s the magic question right there. Make sure you read the 7 need-to-know items above. 

While a cash offer is usually a lower offer than a traditional one, it’s much quicker and allows you to avoid some hassles. However, many people are willing to deal with the hassles of inspection and paperwork to accept a higher offer. It’s your decision to make. 

Are you wanting to know more about real estate and financial freedom? Make sure you check out the rest of our site. 

Jane