Sunday, December 4, 2011

Why is a cash offer better than a mortgage offer when buying real estate?

I heard that a cash offer is more likely to be accepted than a mortgage offer, even if the cash offer is lower. For instance when buying a foreclosure a house gets a cash offer for $70k and a mortgage offer for $100k. The bank is more likely to accept the cash offer for $70k, but why?|||Banks are not trusting anyone that is willing to buy a home. The person that wants to finance usually doesn't have all the money ready to be paid. Which the bank may be very concerned about. This can be a deal breaker for banks and cause a longer process for approval. Being a buyer with cash even if its 20,000 less then the person wanting to finance, you show that you have the upper hand due to the cash offer.





P.S. In this economy banks are trying their best to sell as many homes to qualified people. People with cash in their hands are less of a headache then people wanting to finance.|||It would help you to reach at a final deal in a fast paced way. Then you can do little of repairs and renovations and resell it by getting private money loans from some good lenders in real estate market.


Do Hard Money|||Cash doesn't have to wait for a mortgage company to approve the buyer. Cash is ready to go and some sellers will accept a lower cash offer just to wind up the deal faster.|||B/c cash means guaranteed cash in hand. An offer that requires financing can easily fall through when financing is not obtained.



The deal also goes through WAY faster.|||quicker completion of the deal





a mortgage could always get denied, especially if the the appraiser feels the house is not in move-in condition|||No loan underwriter to kill the deal based on property issues|||faster closing getting the house off of the books

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