Everything you need to know about cash offers

The process of buying a home is often synonymous with a home loan application and suspensive conditions relating to finance in the agreement of sale. If you're a cash buyer, however, the process is quite different and often a lot simpler. Jawitz Properties explains everything you need to know about cash offers and cash sales.

First things first: what is a cash offer?

A cash offer is an offer from a buyer who has the money to buy your property and does not require a home loan. They plan to use funds that they have readily available - whether in a savings account or a trust - to pay for the property they want to buy.

Advantages of cash offers for buyers

The first thing to consider if you have the means to buy a property using cash is that by doing this, you'll avoid paying any interest to the bank. You will not need to utilise the services of a bond originator to help you procure finance and from an administrative point of view, buying a property becomes far simpler and quicker. The deal is far less likely to hit a snag or fall through - and this makes you an appealing prospect to property sellers.

Thanks to no financial institution being involved in the transaction, the process of transferring the property into your name is likely to go much quicker than other property sales. This means that - especially for a seller in a hurry - a cash offer can be hard to turn down.

Over and above this, since savvy sellers are aware of the advantages that they glean from a cash offer, they are possibly a little negotiable on their price. If there are multiple offers made, being a cash buyer would put you at a distinct advantage over those who may be relying on getting a home loan, even if the offer values differ slightly.

Challenges associated with buying a property with cash

It goes without saying that for many buyers, it may never be possible to consider making a cash offer on the home of their dreams. Those considering investing their life savings in a property should bear in mind that they should ensure they have sufficient savings left to cover the transfer costs and any immediate upgrades they may want to do to the property. Over and above this, there should be funds available for any emergency expenses. For many families, taking a small home loan may be a better option than sacrificing the ability to buy the property of their dreams.

Reasons why sellers should take a cash offer seriously

As a property seller, you may be faced with a scenario in which you have to choose between offers. It is possible that you may receive a lower cash offer and a slightly higher offer that is subject to the buyer being granted a home loan. You would need to weigh up each of the advantages of the various offers and bear in mind that a cash offer is also simpler to deal with.

Whether you're looking to buy a property with cash or with the help of a home loan, Jawitz Properties is here to help. Similarly, if you're looking for a buyer for your property, get in touch. We are always available to help you take the next step on your real estate journey.