When a buyer makes an offer on a home, there are generally

5 main terms to the offer: price, earnest money, closing date,

inspection period, and, sometimes, seller paid closing costs.

Many believe that the highest priced offer is the outright best;

however, this is not always true. Most buyers obtain a loan to

fund the purchase of the home, but some are able to purchase

in cash. If a prospective buyer offers a seller cash, that usually

means that the buyer does not need to take out a loan. The

seller receives cash at closing.

If a buyer finances a purchase, the seller receives cash from

the buyer in the form of a down payment and the remainder

from the mortgage lender. In the end, the seller receives cash

at closing. So, is there a difference between a cash offer and a

mortgage offer?

From the seller’s perspective, an all cash sale usually means

that there is no financing contingency and this means there

will not be an appraisal. This is one less hurdle to overcome

to get to the closing table. This sale should be a slam dunk!

Therefore, a seller may accept a lower price all cash offer over

a higher price offer contingent on obtaining a mortgage. Cash

eliminates an element of risk in getting to the closing table.

Typically, after price, the next most important term to buyers

and sellers is the closing date. A seller may want a longer

closing date to allow more time to move out of the home, and

a buyer may want a quicker close to get into the home. We’ve

seen sellers accept lower priced offers if the buyer of that offer

can fully accommodate the sellers preferred closing date.

Another important term in the offer is the home inspection

contingency. Most offers are subject to a home inspection.

If the inspection reveals certain defects, such as a bulging

foundation wall, this sale could go ‘south’. If a buyer can

complete the inspection and any resulting negotiations in

a shorter period of time, this is also more favorable to

the sellers.

Selling or purchasing a home should not be more

complicated than it needs to be. Working with an

experienced Realtor with proper training and years of

experience will make this a smooth, enjoyable experience.