Today’s question is, why do some real estate listings say they want a cash only sale?
Hi, I’m Dawn D’Amico, your trusted realtor in Pennsylvania and New Jersey.
Have you ever seen a real estate listing that says they will only accept cash?
Have you ever gotten a great deal on a property because you were able to pay cash? Tell me about it in the comments below!
So, let’s break this down. Why would a seller and their realtor ask for a cash deal only?
Well, the most common reason is because the property is not in good condition and therefore would not even qualify for a traditional mortgage.
Another reason is that they may need a very quick sale. Any sale that involves a lender will usually take longer than a cash sale where the only thing that they will need to wait for is the title search. Banks have strict criteria for lending money on mortgages and one of the most important criteria is the condition of the property.
If a property is in poor condition and not livable, the bank will not lend money on it because it is just too risky.
There are a few reasons why a property is considered to be in poor condition. It may have been abandoned, foreclosed on, or neglected for a very long time. It may also have been damaged by a natural disaster, such as a flood or fire. Whatever the reason, if a property is in poor condition, the seller may have no choice but to sell it for cash, especially if they do not have the time and or the money to do the repairs themselves.
The type of things that could disqualify a home from being approved for a mortgage by a bank would be things like broken windows, holes in the interior walls, non-working heating, non-working plumbing or electrical, visible mold, and non-working bathrooms or kitchens. This is just an example of things that would get flagged by a bank’s appraisers.
Remember, each lender is different and may have a different set of standards for lending. Now, let me tell you this.
There are untraditional mortgages that could fund a home and its needed repairs. These types of loans do take longer to process and there are a lot more steps involved. Plus, these types of arrangements could be hard to convince a property owner and their agent to accept, especially if they have a quick cash deal already on the table. But, if the house has been sitting on the market a while, they may become more open to alternative financing options and the wait time involved.
I recently had a client who was interested in purchasing a deal and had the cash to do it. We found a property that was in need of a lot of major repairs, but it was in a great neighborhood. The seller had inherited the home and was not local any longer. They just wanted to rid themselves of the property and they were willing to sell it at a great discount because of the property’s poor condition.
My client was able to make a cash offer on the property and the seller accepted it. We were also able to close on the property very quickly without bank involvement and they are now in the process of renovating it to flip and sell at a great profit.
If you are in the position to buy a property that would not qualify for traditional financing, you may be able to get a better deal due to the limited number of buyers able to purchase with cash.
Are you looking to park your cash in an asset?
If you are ready to find your next slice of real estate pie, contact me today for a free consultation on how I can help you buy or sell cash only properties quickly and for the best possible price. Just call or text me at the number below.
There you have it folks, the answer to the question, why do some real estate listings say they want cash only?
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If you are thinking about buying, selling, investing, reach out to me today and let’s see if working together makes sense. And, I’ll talk to you soon.
Dawn D’Amico: 215.962.9307
damico.dawn@gmail.com
