Sellers Cash only why??

Question

Why do some sellers insist on cash only transactions? Even if financed they’d get their full amount at closing anyways so why the insistence on cash only?

Logan Russell · Answer

Less opportunity for things to go wrong with cash buyer. Banks and lenders like to make things over complicated "on occasion". Sometimes I honestly think sellers just like to say cash buyers only because they envision themselves jumping onto a pile of spread out hundos.

Billy Smith · Answer

It's all about the loan company wants to cover their a... so they do an inspection.

When you have a simple kitchen sink without a faucet it will not pass inspection  lots of  small issues will cause it to fail.

Brian Pulaski · Answer

A lot of houses don’t close because borrowing falls through. A buyer having a lender is another obstacle for the seller. If the buyer is going for a VA or FHA loan that is yet another thing that causes more headaches. Appraisals become an issue, and can kill deals. If I’m a seller and have a bunch of offers, with one being cash, I would do everything I could to negotiate the cash buyer to a price I am willing to accept.

Jeff Cichocki · Answer

It's also possible that they are afraid (either they or their agent has been burned) of the financing falling apart at the last minute. Unfortunately, banks (and many other lenders) do the underwriting at the last second. And, typical lenders take 4-6 weeks to make that decision. No body likes taking their property off the market to end up putting it back because the buy can't actually get financed (for any number of different reasons).

Jeshua Patrick · Answer

@Marco Morkous I would add that there are scenarios where a rehab loan is available to an owner occupant but those can be difficult to close because contractors don’t want to bid a job unless you already own the property, even for a fee many times. If the property won’t meet the bank’s lending criteria as-is the only other option is cash (cash, PML, HML).

Crystal Smith · Answer

Here are 2 different reasons that sellers ask for cash only; Speed of Transaction- Cash only closes tend to close quicker; Property won't pass inspection- Seller knows that a traditional bank won't finance the property;

Hai Loc · Answer

In Ontario Canada.. it's common that an offer is submitted with a 5 day condition/contingency on financing. Appraisal and approval is done and deal is firm..

A pre approval is as good as cash in most properties in Toronto area..

I had a few properties in Chicago and Indiana where the deal collapsed 14 days before closing because of financing.. that rarely happens where I am from..

There are some cash buyer who prefer to leverage with banks and use cash as a back up

Bob B. · Answer

Because they have been lied to by wholesalers, the property will not pass inspection or that don't want to deal with the hassle.

Zack Thiesen · Answer

@Marco Morkous Simply because some properties cant be financed. Think of it like this: if you dont pay your mortgage/loan, the lender forecloses and is now stuck with the asset. So when people talk about inspections and appraisals etc, that is the bank making sure it's an asset that they would be okay being stuck with. I almost had a bank refuse to lend bc an old uncapped well was discovered on the property, even though the house was fine.

Todd Rasmussen · Answer

@Marco Morkous

Seller might need to exit quickly and can't wait for the underwriting process. Perhaps the property would not appraise or pass an inspection are all reasons that cash only might be a requisite. The vast majority of sellers don't care who pays them, bank or buyer.

Sellers Cash only why??

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