The Pros and Cons of Cash Buyers in Real Estate

The Pros and Cons of Cash Buyers in Real Estate

The U.S. began experiencing an intense seller’s market since right around the time that the COVID-19 pandemic began. If you’ve been keeping tabs on real estate in the past couple of years, you know that cash buyers have a huge advantage. “Cash buyer” and “cash sales” are both terms that sound simple on the surface, yet they require more
knowledge before using them in practice. Here’s what you should know about the pros and cons of buying cash so you can get the best price.

What Is a Cash Buyer?

A cash buyer is an individual who can purchase a property outright with money at their disposal. They do not require any type of financing like a mortgage or loan. To make the purchase, the cash buyer must have the entire amount available at the time they make an offer.
Unfortunately, some agents will claim they have a “cash buyer,” but to have that cash available, their client must sell another property first. This is not a true cash buyer.

How Does a Cash Sale Work?

For sellers, the sales process is relatively the same. Although, a cash buyer often helps expedite the process if you’re hoping to sell quickly. You won’t need to wait for them to obtain a mortgage.
For buyers, if you’re purchasing a property with cash, you should still go through all the checks your lender would require such as surveys and property searches. This can help protect your investment. Having a licensed and accredited realtor for this process is helpful.

Pros and Cons of Cash Buyers
Having a cash buyer lined up can make sellers feel like the sale is a done deal. Yet, that’s not always the case. Cash buyers offer plenty of advantages (which is why they have such a positive reputation), but they still have their drawbacks.

Pros

1. Chain-free: Cash buyers offer a “chain-free” transaction, which means that the
   purchase of your property isn’t reliant on the successful purchase or sale of other
   properties. As a buyer, the fastest way to become “chain-free” is to sell your
   property to a reputable acquisition company like Freedom Capitol Solutions.
   
2. Reliability: For the most part, cash buyers are constantly on the hunt and then
   decide to put in an offer when they’re certain it’s the right one. Additionally,
   because they are purchasing with cash, they aren’t worried about future financing
   or repossession. Once they put in an offer, they’re normally a solid buyer.
3. Speed: Cash buyers have a strong reputation for being fast. If a seller wants to
   move through the process quickly, cash buyers are a reliable way to do so.
   Having to work with third parties like lenders and title companies slows down the
   process tremendously. If you want to secure a quick move, go with the cash
   buyer.
4. Fewer obstacles: Unfortunately, sellers aren’t in the clear once there’s an offer on
   the table. There are a few obstacles before closing like removing the chain,
   obtaining a mortgage, etc. A cash buyer eliminates these common hindrances
   immediately.
5. Flexibility: When a cash buyer likes a property, they have the capital to purchase
   it. Period. They don’t have to wait on a lender to approve anything.
6. No fix-ups: Some sellers feel as though they can’t sell their home because it
   requires too many repairs or renovations. If you’re in this position, accepting an
   all-cash offer is your best bet. You don’t have to worry about fixing or renovating
   before you sell. You can simply accept an offer and move. If you’re worried about
   finding a buyer, consider working with an acquisition company like Freedom
   Capitol Solutions.

Cons

1. Lower prices: Because cash buyers offer so many benefits, they often use their
   attractive position to barter down the asking price. This can result in a seller
   receiving less than their initial asking price or even marketing value for their
   home depending on the market. Some sellers will accept this because they want
   to move quickly while others may be frustrated by this prospect. Realize a price
   negotiation may be in your future if you have a cash buyer at the table.
2. Scams: Any transaction can result in a scam. To avoid these, use a licensed
   realtor with an office and someone who can show you the numbers (preferably
   with a construction background).

Final Thoughts

Are you looking for a licensed and accredited realtor in Massachusetts to help you sell your home? Reach out to me today. I’ve been in the business for 20 years and have a background in real estate leasing, sales, and purchasing expertise.

I also work with sellers who worry that their homes aren’t ready to put on the market. If you’re looking at extensive repairs before selling, get in touch with me. My acquisition company, Freedom Capitol Solutions, buys homes for cash. I’ll sit down with you and walk you through the numbers myself.