Home Buying in Island Lake>Question Details

lehnert904, Home Buyer in Island Lake, IL

Does a bank favor a cash bid or not over a loan?

Asked by lehnert904, Island Lake, IL Sat Apr 28, 2012

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I disagree that cash is so much better for the bank than cash cash closing. You don't get a cash discount for paying cash or more precisely for waiving the mortgage contingency. Its all cash at closing and fannie mae and freddiemac properties encourage home owners buying as primary residence and buyers given preference during the first 15 days of market time. Investor that pay cash usually use a line of credit that is like cash but really not cash, cash.
1 vote Thank Flag Link Sat Apr 28, 2012
Yes, a bank will favor a cash offer over an offer with a loan contingency.

With bank owned homes the faster they can close the better. And a cash sale can close in a matter of weeks, while an offer with a loan contingency can take upwards of two months to close. And since there is no appraisal required with a cash sale the sale won't be derailed by a low appraisal. Plus with FHA/VA loans the appraisal process also involves an inspection which can slow or kill a sale if there are issues.

If you're considering a cash offer, make sure you can provide proof of funds with your offer or the listing agent won't accept the offer. A proof of funds can be a letter from a lender or a recent copy of a bank statement (with account numbers blacked out) showing you have at least 100 percent of the money in the bank to make the purchase.
0 votes Thank Flag Link Sat Apr 28, 2012
Hello Lehnert904,
Yes indeed, the banks favor a cash offer as then there is no mortgage contingency nor any buyer's appraisal involved. It's one reason why you see so many investors scooping up foreclosures right as they hit the market.

Cash is king!

Good luck to you!

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Sat Apr 28, 2012
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