The seller or owner sets the conditions for selling a house. Although prospective buyers may bid on different terms or negotiate a deal, the seller always has the final say.
That’s why many sellers set the sale of a home on a cash-only basis. But, those new to the real estate business may not understand this cash-only sale.
What is a cash-only home sale all about?
When a homeowner lists his house for sale on a cash-only basis, he usually gives quite practical notice to avoid wasting the time of buyers with financing and his time as the seller.
Most of the time, it can be seen even on the sale sign, where it is specified that the sale of the house is only cash, referring to the impossibility of proceeding with the purchase if it is intended to be done through financing.
By placing this condition, the seller makes their position clear that they will not receive any financing and will only receive payment in cash.
The phrase says “cash,” but it does not refer to receiving all the banknotes in a bag because, although it is possible and valid, it would be too tedious and unnecessary. There would be a high possibility of making a mistake when counting the money.
By “cash,” they refer to making the payment in a single transaction, without mortgages, loans, or credits. Usually, the payment is made through a bank transfer to the account of the owner or the intermediary company.
Why does a seller prefer to sell a house for cash?
The reasons for a seller to prefer the sale of a house in cash can be quite broad due to the nature of this business.
Speed in the process
Speed is one of the main reasons why sellers prefer cash transactions. When buying a house with cash, you don’t go through the entire mortgage approval process by the bank.
Thus, the process of selling a house with cash is much faster. It is especially for sellers who want to start purchasing their other home or need the money for whatever reason.
When selling a home the traditional way, there is much more paperwork involved with having an entity as an intermediary because of the buyer’s need for financing or a loan.
Inspections, appraisals, documents, etc., are usually required to evaluate obtaining the mortgage. Even so, none of the above guarantees that the entity will approve the loan or credit to the buyer.
Under the cash sale modality, the transaction takes place solely between the buyer and the seller, except when the intervention of an attorney or real estate agent is preferred.
The poor condition of the house
One of the most important requirements for traditionally selling a house through financing is the home’s good condition. When the house is not in optimal condition, it is a loss of money for the bank.
Many sellers may ask for cash payment because they know no bank will approve a loan for a particular house due to its condition. It may have been abandoned, unfinished, or poorly maintained.
Rather than waste a buyer’s time knowing that they will probably get a negative response to their mortgage, they prefer to ask for a cash purchase of the home as a requirement.
The condition is essential for the buyer because the house could be apparently in good condition, but the seller knows that he would notice all the defects and problems upon inspection.
The buyer must be very attentive to these details. Otherwise, you could acquire a house for a very high price compared to a real appraisal.
Normally, to carry out the sale of a house in the traditional way, a real estate agent is required due to the complexity of the process and the time-consuming nature. Sellers use them to avoid unnecessary delays and possible mistakes.
Because of all the processes required to acquire a home through financing, everything is slower. The longer it takes, the higher the real estate agent’s fee will be, and in the end, it all has to come out of the seller’s pocket.
Also, the seller is not obligated to spend significant money on repairs or maintenance by having the peace of mind that the house will probably go through an appraisal or inspection.
Can you cancel the sale of a house under these conditions?
As stated in the beginning, the seller always has the final word, and when they express their intention only to receive cash payments, it is very difficult to change their mind.
You are even attempting to offer them payment by financing rather than cash may be considered disrespectful of the seller’s decision. As far as possible, you should avoid this situation.
But, in terms of “power,” it is possible to refute the sale of a house on a cash-only basis. It is sufficient to offer the seller a contract under financing and provide sufficient reasons why it might be more convenient to sell for cash.
In most cases, such a request must be accompanied by an offer considerably higher than the seller’s offer. Otherwise, convincing the seller would be virtually impossible.
Likewise, no matter how many strategies to dissuade the seller from receiving a financing payment are applied, in the end, it is the seller who has to decide whether or not to insist; it can be considered bad taste and be uncomfortable for both of you.